Sanedi exec floats idea of zero-rated electricity as affordability concerns grow

Amid growing concern over the affordability of electricity for businesses and households, the head of the energy secretariat at the South Africa National Energy Development Institute (Sanedi) has floated the idea of including electricity in the list of products zero-rated for value-added tax (VAT).

Listing the price of electricity and load reduction as the two most pressing matters facing the electricity sector at the start of 2026, Sanedi's Professor Sampson Mamphweli listed the prospect of a VAT zero-rating as one of several interventions to consider.

"This can shave off 15% from the price, which will become an immediate saving to the consumers," Mamphweli tells Engineering News, while acknowledging that Sanedi has not yet modelled the fiscal impact or canvassed the idea with the National Treasury.

VAT and the basket of zero-rated products came under scrutiny last year when Finance Minister Enoch Godongwana announced – and subsequently withdrew, following an intense political backlash – a proposal to increase the VAT rate initially to 15.5% and then 16%, while increasing the number of items in the basket of zero-rated items.

Zero-rated electricity was never included among the options, with electricity likely to be a significant contributor to VAT collections. Net revenue from VAT totalled R457.8-billion in the 2024/25 fiscal period and the South African Revenue Service has previously highlighted the negative impact of loadshedding on VAT collections.

Besides VAT, Mamphweli argues that attention should also be given to the cost of primary energy, suggesting that negotiations with the coal suppliers should also be prioritised in an effort to reduce coal costs.

Eskom, he says, currently buys coal at a price between R450/t and R950/t.

"The average cost of coal to Eskom is currently above the international benchmark used by the National Energy Regulator of South Africa in calculating the cost of primary energy when they evaluate the Eskom application for tariff hikes through the multi-year price determination process.

"By reducing the cost of primary energy supply Eskom can reduce the price of electricity generation, and then pass that saving to the consumers."

Mamphweli's suggestion on reducing coal costs comes as Eskom and domestic ferrochrome producers are assessing a coal-linked deal to dramatically reduce tariffs being charged by the utility to the smelters, many of which have already stopped producing owing to uncompetitive electricity tariffs relative to those charged to smelters elsewhere, especially in China.

Electricity and Energy Minister Dr Kgosientsho Ramokgopa has indicated that the deal could involve Eskom securing cheap coal from "stranded" mines. The coal would reduce electricity production costs, and the benefit would be passed on to the smelters in the form of a far lower tariff, which could fall from about 135c/kWh to 62c/kWh.

For other large consumers, Mamphweli believes there is a need for negotiated tariffs that sustain their profitability, while Eskom recovers the cost of electricity generation, transmission and distribution with "minimum profit".

"Due to the economies of scale, the large consumers can still make Eskom profitable even if they pay lower tariffs because they will be consuming more and paying."

On a structural level, Mamphweli believes affordability could also be improved by the introduction of a new market that "will assist in bringing in more role players who will compete for the various market segments and provide electricity at lower costs".

Regarding load reduction, which is implemented where networks are being overloaded, Mamphweli believes a holistic approach is needed; one that includes the implementation of energy efficiency and demand-side management measures.

"The use of smart meters that can detect system overload and switch between higher supply circuit breakers (63A) to lower supply circuit break...

SIU returns R1.7bn to NSFAS purse

The National Student Financial Aid Scheme (NSFAS) has received an injection of R1.7-billion, from unallocated funds recovered by the Special Investigating Unit (SIU) and which will be returned to the purse for higher education students.

SIU spokesperson Kaizer Kganyago explained that the money came from R2-billion that the SIU had so far received from universities, technical and vocational education and training (TVET) colleges and unqualified former students.

The funds in question were unallocated from 2016 to 2021 and represent financial resources that were designated for students who qualified for funding but later changed institutions or deregistered.

"These funds are retained by the institution for one year, but in this case were kept for more than a year.

"The existence of unallocated funds can be attributed to inadequate control systems and a lack of reconciliation processes implemented by NSFAS during that period, resulting in a failure to recover these funds from institutions of higher learning," Kganyago explained.

In contributing to the R2-billion recovery, the SIU collected R126 478 184.64 from 1 055 parents and unqualified NSFAS beneficiaries who signed Acknowledgments of Debt and agreed to repay the money over time.

The SIU is urging unqualified NSFAS beneficiaries who have not been in contact with the unit to come forward and arrange for repayment.

"Furthermore, the SIU has received R69 727 824.22 from the University of the Free State. This is the institution's second payment towards recovering unallocated funds. The SIU has also received a second payment from the University of Mpumalanga of R 5 502 040.09, as well as R15-million from Tshwane North TVET College," Kganyago revealed.

Meanwhile, the SIU has noted the announcement by NSFAS earlier this month that it will implement the SIU's systematic recommendations by introducing a framework that includes a data-driven reporting process to ensure timely payments to providers.

The framework will improve "accountability, generating monthly occupancy and payment reports", Kganyago said.

NSFAS is also considering an in-house payment functionality to streamline financial management and eliminate the middleman.

IFP supports Zulu King's call to rename KwaZulu-Natal

The Inkatha Freedom Party (IFP) in the KwaZulu-Natal legislature on Wednesday expressed its full support for Zulu King Misuzulu kaZwelithini's suggestion that the KwaZulu-Natal province be renamed KwaZulu.

The party said kaZwelithini's proposal was "timely and historically justified".

The colonial name of Natal and the KwaZulu homeland were merged in South Africa's democratic transition in 1994.

"… as history tells us – and it is well known – that in the past, during the reign of King Shaka, who ruled over many tribes, the boundaries of KwaZulu extended as far as the uMtamvuna River in the Eastern Cape, Balfour in Gauteng, and Ermelo in Mpumalanga. The demarcation resulted in the loss of many parts of KwaZulu, which were placed under other provinces. This proposal therefore comes as no surprise and is neither unreasonable nor uncalled for," stated IFP national chairperson and Chief Whip of the KwaZulu-Natal legislature Blessed Gwala.

Last week, kaZwelithini announced that he would start a campaign to drop 'Natal' from the province's name and insisted that it must be known as KwaZulu.

"We need to remove this Natal. This is KwaZulu so I don't understand why we have this Natal," he said.

The IFP said it felt "vindicated" by kaZwelithini's proposition, and said the name change would acknowledge the Zulu Kingdom and its historical, cultural, and political significance.

Gwala said the current name remained a "compromise that failed to fully reflect this reality" and added that during the Convention for a Democratic South Africa negotiations in the early 1990s, there was intense debate over the renaming of provinces, particularly Natal.

He believes the King's call will open the door to addressing other long-standing historical distortions, particularly the matter of Pietermaritzburg, which is also referred to as uMgungundlovu.

"It is a well-known fact that uMgungundlovu was King Dingane's royal palace near uLundi, which was destroyed, after which the Voortrekkers named Pietermaritzburg a 'fake' uMgungundlovu with the deliberate intention of mocking and ridiculing the Zulu people.

"Continuing to refer to Pietermaritzburg as uMgungundlovu is deeply painful and misleading, as it distorts history and trivialises the destruction of the original royal palace," he explained.

He said retaining the name perpetuates a "false narrative and gives the impression" that the Zulus accept or celebrate the injustices imposed on them.

"We now have both the moral authority and constitutional right to correct these historical wrongs," Gwala said.

The party wants kaZwelithini's call to further empower the provincial government, particularly the Department of Sport, Arts and Culture, to urgently review and correct indigenous place names that have been incorrectly written or distorted over time.

This included places such as uMbogintwini and Ixopo, whose current spellings stripped them of meaning and cultural context, he added.

He highlighted that the correct writing and restoration of indigenous place names was not administrative but a matter of "dignity, identity, and justice".

"Place names carry history, meaning, and collective memory. When written correctly, they restore linguistic integrity, affirm cultural heritage, and honour the lived experiences of local communities," he explained.

Gwala stated that this process would strengthen social cohesion, promote unity, and advance reconciliation by ensuring that public spaces truthfully reflected the histories and identities of the people they represented.

Oscar Mabuyane accuses AbaThembu King, Israeli Embassy of breaching diplomatic protocols

Eastern Cape Premier Oscar Mabuyane said the Israeli Embassy's recent engagements with provincial institutions, without the approval of government, constituted a clear breach of diplomatic protocol and undermined cooperative governance, as well as the sovereignty of South Africa.

Mabuyane on Tuesday expressed concerns with reports of a visit by officials from the Embassy of Israel to public institutions within the province, including healthcare facilities and Walter Sisulu University, without the knowledge, consent, or support of the provincial government.

The Israeli Embassy visited Walter Sisulu University and donated goods to public hospitals in the province.

Mabuyane rejected what he said was a "sinister deal" between AbaThembu King Buyelekhaya Dalindyebo and Israel, accusing the Israeli government of trying to undermine the sovereign right of South Africa to manage its international affairs.

He said Dalindyebo had no mandate to interfere in the management of hospitals, including the sourcing of foreign assistance.

He added that the cooperation between government and international partners, as a rule should be initiated and managed by the Department of International Relations and Cooperation and the National Treasury.

Mabuyane viewed attempts to bypass established protocol as "mischievous".

"… the conduct of foreign relations is a constitutional competency vested in the national sphere of government. Accordingly, any engagement between foreign diplomatic missions and organs of State must occur through established diplomatic channels and in line with national protocols, in close coordination with both national and provincial authorities," he explained.

He said while the Eastern Cape provincial government was committed to advancing international partnerships that supported development, investment, innovation, and service delivery for the benefit of Eastern Cape residents, these relations must be grounded in "mutual respect, adherence to diplomatic conventions, and respect for South Africa's constitutional order".

He stressed that no external entity had the right to bypass legitimate governmental structures or to engage with public institutions in a manner that compromised governance, accountability, or public trust.

Mabuyane has further directed the MEC for Health to investigate how departmental health officials reportedly accepted donations without following proper channels.

He said the provincial government would engage relevant stakeholders, including national authorities, to ensure that appropriate measures were taken to safeguard the integrity of government processes, protect public institutions, and prevent any recurrence of such incidents.

Goldman, Morgan Stanley's South Africa inflation call undercuts Central Bank

Goldman Sachs and Morgan Stanley see room for the South African Reserve Bank to lower its inflation forecast for 2026, as policymakers prepare for their first interest-rate decision of the year later this week.

The rand has strengthened considerably from the central bank's November assumption of 17.25 per dollar for the first quarter and oil prices are tracking well below its $67-a-barrel forecast for this year, Goldman's Andrew Matheny and Ludovica Ambrosino wrote in a note.

"In our view, this implies a likely downward revision of 0.2-0.3 percentage points to the inflation outlook for 2026," they said.

That view matches projections of 3.2% by Morgan Stanley and Nedbank Corporate and Investment Banking, and compares with the 3.3% median estimate of 20 economists surveyed by Bloomberg and the central bank's 3.5% forecast. At that level, inflation would be close to the monetary authority's new 3% target, formally adopted by the National Treasury in November.

Despite the investment banks' dovish outlook, they're split on whether policymakers will cut interest rates on Thursday — a division echoed in Bloomberg's broader survey of 21 economists, where 11 expect a 25 basis-point cut to 6.5% and the rest a hold.

"While we see the case for a rate cut and view the decision as a relatively close call given the recent sharp rand appreciation, we think that the SARB would prefer to err on the side of caution and remain behind the curve in the cutting cycle," Matheny and Ambrosino said. "This is especially the case in the context of somewhat stronger recent growth data that reduce the urgency to cut rates, as well as in the presence of geopolitical risks that could pose upside to the oil price or downside to risk sentiment and the rand."

Morgan Stanley's Andrea Masia said in a note seen by Bloomberg that he expects officials to adopt a cautious approach because of more rigid inflation expectations and foreign-exchange weakness that's anticipated in the second half of the year.

By contrast, Nedbank CIB's Reezwana Sumad points to the rand's roughly 3% gain against the dollar this year, falling oil prices and inflation undershooting the central bank's 2025 forecast by about a percentage point as reasons to lower borrowing costs.

The central bank's own models show gradual interest-rate cuts in 2026 as price pressures subside.

ANC calls for disciplinary action in ballot paper scandal

The African National Congress (ANC) on Tuesday called for disciplinary action and possibly the laying of criminal charges, following allegations of serious misconduct.

Controversy erupted within the party following the discovery of ballot papers linked to the party's Greater Johannesburg regional elective conference. The ballot papers were allegedly discovered at a private residence in Pretoria.

On Sunday, members of the South African Police Service (Saps), and the party's security personnel conducted an onsite inspection at premisses where alleged misconduct was taking place, and which involved the service provider appointed to assist in the administration of the recent regional conference of the ANC Johannesburg region.

ANC national spokesperson Mahlengi Bhengu said the investigation confirmed prima facie misconduct.

"…based on this information, ANC security reported the matter to the Saps," she said.

The ANC said it regarded the allegations as extremely serious.

"If proven, they would have the effect of bringing the ANC into disrepute and drawing into question the credibility and integrity of internal ANC electoral processes," Bhengu warned.

She stressed the ANC's commitment to ensuring that the law and the ANC's constitution were respected and upheld.

"Any subsequent processes will be conducted in a manner consistent with the values and prescripts of the ANC constitution and the laws of the republic," she said.

The party urged members to await the outcome of the processes before making public statements, and to ensure that leadership of the Regional Executive Committee was allowed to continue in their duties.

ActionSA expands footprint in North West with merger

ActionSA president Herman Mashaba on Monday announced that his party will be joined by the Azanian Independent Community Movement and the Creatives Congress Movement, under the Green Umbrella Project.

Mashaba pointed to decades of communities facing incompetence, corruption, and broken promises from political parties.

ActionSA, through the Green Umbrella Project, aims to unite a diverse group of political parties under a single banner to provide communities with a "unified voice and a real chance for change".

Mashaba said the partnership between ActionSA, the Azanian Independent Community Movement and the Creatives Congress Movement will see ActionSA's representation grow by seven councillors, expanding its reach in the North West, and establish a presence representing a movement of artists and creatives to "champion innovative cultural initiatives, and strengthen our connection with diverse communities".

Currently, ActionSA is represented by 23 councillors in the North West.

So far, the Green Umbrella Project has welcomed several political parties such as the Botho Community Movement; Capricorn Independent Community Activists Forum; Magošhi Swaragang Movement; Democratic Union Party and Forum 4 Service Delivery party.

ActionSA has grown from 91 public representatives to 141 represented across South Africa.

"Today marks yet another milestone in this journey, as community-rooted parties from across the provinces join under the ActionSA banner, bringing our total representation to nearly 150 public representatives. And this is just the beginning," Mashaba announced.

He added that ActionSA's trajectory was defined by exceptional growth in rural communities and urban centres.

"The proof of this is our first by-election victory in Ward 7 in Ramotshere Moiloa municipality in the North West in October last year, where ActionSA unseated the African National Congress (ANC) in their historic rural stronghold.

"While in the heart of the City in Johannesburg, Ward 130, ActionSA nearly tripled its support to 22.66%, placing us second only behind the ANC, and beating both uMkhonto weSizwe Party (MKP) and the Economic Freedom Fighters (EFF)," Mashaba said.

He attributed the party's victory in Ward 7 to a simple strategy: the unity and consolidation of opposition political parties rooted in communities.

"…these parties, despite not having a broad national footprint, are often the most in touch with local needs and best placed to fight for the interests of their communities," he added.

Mashaba said the momentum ActionSA was building was not about power but about partnership and restoring faith, noting the work of Tshwane Executive Mayor Dr Nasiphi Moya.

"Working with our coalition partners, Dr Moya leads a team whose work is being noticed even by her harshest sceptics and critics. This is what ActionSA brings to local government," he stated.

South Africa nears fiscal turning point, Treasury chief says

South Africa's budget will show government debt stabilising relative to gross domestic product for the first time in almost 20 years, said the head of the National Treasury. It will also show a third straight primary surplus, supporting fiscal credibility and economic-growth prospects.

"We are at an important turning point in South Africa's fiscal trajectory," Director-General Duncan Pieterse said in an editorial published in Business Day Monday. "Improved fiscal conditions will reduce the cost of servicing our debt, freeing up resources for critical frontline services and investment in public infrastructure."

The prospect of better metrics has pushed down bond yields, lifted the rand and delivered the first major ratings upgrade in 16 years.

The South African Treasury is working to reverse a deterioration in public finances since the global financial crisis. A series of bailouts for State-owned companies, a high civil servant wage bill and graft contributed to downgrades of South Africa's credit ratings to junk. The fallout from the coronavirus pandemic further weighed on public finances, while GDP expanded by an average of less than 1% annually over the past decade.

In November, the Treasury projected debt would stabilise at 77.9% in the year through March. Finance Minister Enoch Godongwana will present a new budget with revised estimates on February 25.

Godongwana will also update plans for a formal fiscal anchor, which Pieterse said would help sustain the gains in fiscal credibility over the long term.

In 2021, the Treasury made the primary budget balance its main fiscal anchor, instead of a spending ceiling. It previously said achieving a primary surplus — where revenue exceeds non-interest expenditure — would allow the government to "reconsider the funding of South Africa's priorities" in a more stable environment.

The Treasury has also reformed consultation processes for the fiscal framework, including formalising talks with members of the country's coalition government, and discussions about "tough decisions" have already begun, Pieterse said.

Godongwana delivered three budgets early last year, after a dispute over a surprise plan to hike value-added taxes threatened to split the so-called government of national unity. The third iteration, which withdrew the revenue measure, was eventually adopted.

Ramaphosa calls for increased investment to maintain economic recovery

South Africa must build on the momentum of its economic recovery, and expanding investment is the key to a sustained shift in the country's economic trajectory, President Cyril Ramaphosa writes in his latest weekly newsletter.

He highlights four consecutive quarters of growth, a steady reduction in unemployment and recent data from Statistics South Africa showing that levels of poverty and inequality have declined, as indicators of economic recovery.

"Confidence in our economy is rising, the [JSE] has been performing well and the average inflation rate is the lowest in two decades," Ramaphosa acclaims.

He also cites the country's exiting of the Financial Action Task Force grey list last year, as well as a sovereign credit ratings upgrade by S&P Global as positive developments.

Meanwhile, the World Economic Forum (WEF) last week provided a prominent platform for South Africa to demonstrate the results of its reform story, business organisation Business Leadership South Africa CEO Busi Mavuso writes in her latest weekly newsletter.

Finance Minister Enoch Godongwana led a delegation of Ministers, leaders of industry and State agencies to the 2026 WEF meetings in Davos, Switzerland.

"When we came here in 2025, we presented our ambitious plan for driving economic reforms, building investor confidence and mobilising private investment. We returned in 2026 with concrete evidence of our progress. We returned not with promises, but with real successes," the Minister highlighted.

Mavuso emphasises the importance of this credibility. "When international investors assess country risk, delivery on commitments moves a country from 'interesting potential' to 'viable investment destination'.

"The 98% reduction in loadshedding between 2023 and 2025, combined with improved fiscal discipline delivering consecutive primary budget surpluses, provides evidence that South Africa can execute complex reforms," she explains.

FURTHERING GROWTH

Godongwana indicated that government would deliver on its commitment to stabilise debt in the current fiscal year, showcasing its commitment to the macroeconomic stability and consistent policy execution needed to create an environment for higher local and global investment.

He also noted that the recent lowering of the inflation target would contribute to reducing costs across the economy and providing policy and price certainty for investors.

Meanwhile, the Presidential Economic Advisory Council (PEAC), at its first meeting of the year last week, said that government should translate recent positive developments into enduring growth by simultaneously boosting public infrastructure spending and lowering the cost of doing business.

A body of local and international economists, academics and practitioners, the PEAC provides strategic and evidence-based advice on policy decisions that promote economic stability, growth and inclusivity.

"Increasing infrastructure investment is not simply about spending more. It is about delivering projects that reduce the cost of doing business, unlock growth and create jobs," Ramaphosa explains.

PEAC members expressed strong support for the ongoing programme of structural transformation in key sectors such as electricity, logistics and water, he points out.

These interventions aim to enable competition, improve the efficiency of network industries and reduce costs across the economy.

Ramaphosa emphasises electricity reforms as pivotal to this.

"A competitive electricity market is essential to bringing down the cost of electricity. And lower electricity prices are critical for both inclusive growth and social development. Similarly, improving logistics performance in rail, ports and freight corridors remains essential to exports, industrialisation and job creation," he avers.

South Africa also requires increased public investment in infrastructure, the President indicates.

"Over the last few years, we have laid...

DA wants inquiry into 'flawed' process concerning Iran's participation in BRICS naval exercise

The Democratic Alliance (DA) on Friday called for a judicial inquiry and an urgent parliamentary debate to enforce accountability in the matter involving Iran's participation in BRICS Plus naval exercises recently held near Cape Town.

Last week, South Africa's defence ministry said it would launch a probe into Iran's participation in the exercises, this after President Cyril Ramaphosa had asked Iran to withdraw from the event to avoid antagonising the US.

The Department of Defence (DoD) explained that the drills formed part of a China-led joint, inter-agency, inter-departmental, multinational exercise, hosted in South Africa under the theme 'Joint Actions to Ensure the Safety of Shipping and Maritime Economic Activities'.

"Exercise Will For Peace 2026 brings together navies from BRICS Plus countries for an intensive programme of joint maritime safety operations, interoperability drills and maritime protection serials… This theme reflects the collective commitment of all participating navies to safeguard maritime trade routes, enhance shared operational procedures and deepen cooperation in support of peaceful maritime security initiatives," the DoD had said.

DA spokesperson on Defence and Military Veterans Chris Hattingh described the apparent defiance of Ramaphosa's orders as "a chain-of-command failure", and not an operational issue.

He called for accountability under decisive presidential action and public disclosure of how the issue would be addressed.

The party wants the judicial inquiry to establish who authorised Iran's participation after Ramaphosa had asked for a withdrawal.

He stressed the DA's call for transparency and parliamentary scrutiny over the matter.

"...since then, it has emerged that Iranian warships participated despite credible reports of a presidential instruction to exclude them; official explanations shifted repeatedly; communications were deleted; and the Iranian vessels remain in South African waters. Independent analysis confirms a serious breakdown in command, control, and civilian oversight," Hattingh said.

He wants Ramaphosa to "deal decisively" with Defence Minister Angie Motshekga and publicly disclose his plan of action.

Last week, the DA urged Motshekga to appear before the Portfolio Committee on Defence to account for the handling of Ramaphosa's order.

Hattingh highlighted that despite announcing a Board of Inquiry, Motshekga had not appointed it or published its terms of reference.

"Accountability cannot wait on a process that does not exist. The President must now step in, assert control, and make clear to Parliament and the public what corrective action will be taken, by whom, and on what timeline," he said.

He said the DA wanted an urgent parliamentary debate, alongside action from Ramaphosa and the transparent disclosure of his plan to restore civilian oversight and command integrity.

"Civilian control of the military underpins South Africa's democracy. When that control is weakened, the constitutional order is put at risk," he warned.