South African authorities will investigate the awarding of contracts to a company that reportedly has links to two aides of Health Minister Zweli Mkhize.

The Special Investigating Unit is probing whether the Department of Health followed the correct procedures when it awarded the contracts, spokesperson Kaizer Kganyago said Thursday by phone.

“We have received complaints on allegations around the procurement process at the Department of Health and are looking into them,” he said. “We are not specifically looking at allegations against any individuals.”

A news outlet reported on Wednesday that the aides to Mkhize benefited from a Covid-19 contract awarded by the government last year. Health Ministry spokesperson Lwazi Manzi didn’t immediately respond to a mobile-phone text message sent by Bloomberg requesting comment.

Investigators are gathering information from all stakeholders, Kganyago said.

“We cannot say when the work will be completed, but we will prioritize it and ensure that we conclude as soon as possible,” he said.

A South African Airways (SAA) flight, scheduled to transport the country's next consignment of Covid-19 vaccines, departed on Wednesday night.

The A340 aircraft is expected to return on Saturday, said Louise Brugman, a spokesperson for Matuson & Associates, which is overseeing the embattled airline's business rescue.

"SAA has been approached by the government to assist with the transportation of vaccines," she added.

On Tuesday, Health Minister Zweli Mkhize announced in Parliament that 80 000 doses of the Johnson & Johnson (J&J) Covid-19 vaccine were expected to arrive in the country on Saturday. These will be added to the first consignment of 80 000 doses of the same vaccine, which arrived on 16 February.

An SAA plane, which was supposed to fetch the vaccines for SA in Brussels, Belgium, was prevented from departing because it was not compliant with civil aviation regulations at the time, according to Fin24.

The J&J vaccine, used in the Sisonke Programme, provides 57% protection against moderate to severe disease, 85% protection against severe disease and 100% protection against death, based on evidence from clinical trials that included South African participants.

However, new research has indicated that the protection rate may be higher.

As of Wednesday, the total number of healthcare workers vaccinated under the Sisonke Programme was 41 809.

The Economic Freedom Fighters (EFF) has written to President Cyril Ramaphosa requesting that government adjust Level 3 lockdown regulations to allow for public political gatherings.

Local government elections will almost certainly be held in South Africa between August and November, despite appeals from both the EFF and the ruling African National Congress (ANC) for the polls to be postponed.

In a letter from its attorneys, the EFF says government must allow the physical attendance of political gatherings, municipal council sittings, office of legislatures, Parliament and National Assembly in compliance with Covid-19 protocols.

The party says the adjustments will allow for political parties to engage in political programmes that will hold government accountable.

The EFF evoked the political rights guaranteed by the Constitution, saying the ban on political gatherings was irrational as the lockdown regulations allowed for gatherings in restaurants, workspaces and religious institutions and on beaches.

“Every citizen is free to make political choices which includes the right to participate in the activities of a political party and to campaign for a political party or cause. The lockdown regulations as they currently stand, constitute an unjustified limitation to sections 17 and 19 political rights guaranteed by the Constitution,” the party said.

It called for a response from Ramaphosa by Friday.

As was widely anticipated, Finance Minister Tito Mboweni refrained from announcing any new tax measures in his 2021 Budget, citing the need to support the pandemic-afflicted economy’s recovery.

In addition, he announced a surprise withdrawal of previously announced hikes worth R40-billion, which had been signalled in the 2020 Medium-Term Budget Policy Statement (MTBPS).

In October, Mboweni indicated that there would be tax increases of R5-billion in 2021/22, R10-billion in 2022/23, R10-billion in 2023/24 and R15-billion in 2024/25.

The decision to hold back on new taxes was made following a R99.6-billion upward adjustment, to R1.36-trillion, to the tax revenue estimate for 2020/21 when compared with the MTBPS projection.

Collections were still expected to fall R213.2-billion short of the revenue forecast made in the 2020 Budget estimate, which predated the entry of Covid-19 into South Africa.

The National Treasury also cited research showing that tax increases had a larger negative effect on growth than spending reductions and that these effects were more pronounced during a downturn.

“Given the smaller revenue shortfall compared with October 2020 estimates, the previously announced tax increases of R40-billion have been withdrawn to support the economy,” the 2021 Budget Review document stated.

The consolidated Budget Revenue for 2021/22 was forecast to be R1.52-trillion against expenditure of R2.02-trillion.

The main tax adjustments announced in the Budget included: an increase in personal income tax brackets by an above-inflation 5%, which would provide R2.2-billion in tax relief; an 8% increase in excise duties on alcohol and tobacco; inflation-related increases of 15c/litre and 11c/litre for the general fuel levy and the Road Accident Fund levy respectively, with effect from April 7; and the resetting of the Unemployment Insurance Fund contribution ceiling at R17711.58 a month from March 1.

In addition, Mboweni announced that the corporate income tax rate would be lowered to 27% for companies with years of assessment commencing on or after April 1, 2022.

"This will be done alongside a broadening of the corporate income tax base by limiting interest deductions and assessed losses. We will give consideration to further rate decreases to make our tax system more attractive. We will do this in a revenue-neutral manner. We also intend to leverage the insights of the Davis Tax Committee as we undertake this reform."

The Minister also announced an additional allocation of R3-billion to the South African Revenue Service over the coming three years to establish a dedicated unit to improve compliance of individuals with wealth and complex financial arrangements.

14% BUDGET DEFICIT

The consolidated Budget deficit, meanwhile, had widened from 5.7% of gross domestic product (GDP) in 2019/20 to an estimated 14% in 2020/21, an improvement on the 15.7% deficit forecast in October.

Better-than-projected revenue growth had provided government with space to narrow the consolidated Budget deficit more rapidly than projected in October 2020, however, from the 14% level this year to 6.3% of GDP in 2023/24.

Gross debt was also projected to stabilise at a lower, yet still elevated, level of 88.9% of GDP in 2025/26, rather than the 95.3% forecast in October. Prior to the onset of the Covid-19 pandemic, the National Treasury had forecast that government’s gross debt would peak at 65.6%.

Gross loan debt was still expected to increase from R3.95-trillion, or 80.3% of GDP, in 2020/21 to R5.23-trillion, or 87.3% of GDP, by 2023/24.

Debt-service costs would rise from R232.9-billion in 2020/21 to R338.6-billion in 2023/24. “These costs, which were already the fastest-rising item of spending, now consume 19.2% of tax revenue.”

Mboweni argued that government’s fiscal strategy put South Africa on course to achieve a sufficiently large primary surplus, whereby total revenue will exceed noninterest expenditure, to stabil...

To download a copy of the Minister's Budget speech, click here.

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Finance Minister Tito Mboweni made a direct link to a successful roll-out of South Africa’s free Covid-19 vaccination programme and the country’s economic recovery, telling lawmakers on Wednesday that a successful roll-out would support a full reopening of the economy, boost growth and facilitate renewed trade.

A slow, stuttering roll-out, by contrast, would pose the most significant threat to any economic recovery.

At the start of 2021, South Africa’s vaccine procurement strategy was heavily criticised as being too slow and had been rocked further by a study showing minimum effectiveness of the AstraZeneca vaccine against mild forms of the variant first detected in South Africa, which had since emerged as the dominant variant in the country.

The outlook for vaccine procurement had improved in recent weeks, however, with the first frontline health workers receiving their Johnson & Johnson vaccines in mid-February and with further doses on the way.

Mboweni announced that an allocation of R10-billion had been made for the roll-out over the coming two years, of which R6.5-billion would be used to procure and distribute vaccines.

"We increase the contingency reserve from R5-billion to R12-billion to make provision for the further purchase of vaccines and to cater for other emergencies," he added.

Government would also put in place a no-fault compensation fund to cover claims in the event of any severe vaccine injuries, allocations to which would be announced in due course, the Minister said.

Since the State was procuring vaccines on behalf of both the public and private sectors, some revenue would return to the fiscus when private providers purchased vaccines from the State.

An amount of R100-million would also be transferred to the South African Medical Research Council for vaccine research, while provincial health departments had been allocated R2.4-billion to administer vaccines. The Government Communication and Information System was also allocated R50-million for an associated communications campaign.

South Africa would pursue a three-phase vaccine roll-out strategy and had set a target of vaccinating 67% of the population over 12 months. Access to vaccinations will be provided free of charge.

Delivering his 2021 Budget against the backdrop of a pandemic- and lockdown-induced 7.2% contraction in gross domestic product (GDP) in 2020 and a surge in the official unemployment rate to a record high of 32.5%, Mboweni said that ensuring access to vaccines was government’s immediate priority.

The National Treasury was projecting GDP growth of 3.3% for 2021, moderating to 2.2% and 1.6% in 2022 and 2023 respectively.

In recognition of South Africa’s growth predicament, Mboweni refrained from adding new taxes and announced that R40-billion in tax increases signalled in the Medium-Term Budget Policy Statement had been withdrawn.

In October, the National Treasury projected tax increases of R5-billion in 2021/22, R10-billion in 2022/23, R10-billion in 2023/24 and R15-billion in 2024/25.

Besides the economic stimulus provided by the vaccination programme and the withdrawal of tax hikes, Mboweni said that decisive action on structural reforms was required to inspire investor confidence, strengthen the recovery and improve prospects for higher growth.

The reforms being prioritised through government’s Operation Vulindlela, a joint reform-management initiative of The Presidency and the National Treasury, included:

electricity regulatory reforms designed at stimulating distributed-generation investments of below 50 MW by larger energy users, while accelerating government’s utility-scale procurement programmes;

switching households using analogue televisions to digital signals by March 2022 so that there was sufficient spectrum to meet demand, lower digital-communication costs and improve quality;

Finalising policy to enable the ra...

The Gauteng High Court has extended the State capture commission of inquiry by three months, following an urgent application by commission chairperson, Deputy Chief Justice Raymond Zondo, on Tuesday morning.

Zondo's application for the extension, which was not opposed by any party, was granted by Judge Nomonde Mngqibisa-Thusi. Her ruling was that Zondo has until 30 June to finalise his commission's investigation report.

The inquiry, which was originally intended to run for 180 days, was previously granted a "final extension" by Gauteng High Court Judge Wendy Hughes – who stressed that "... further extensions would not be warranted.

"The interest of justice dictates that finality be attained with findings, recommendations and a report of the commission. The commission owes this to the nation as the work of the commission is of national interest," she said at the time.

Zondo, however, argued that the commission had been prevented from hearing evidence for three months by the Covid-19 pandemic lockdown.

"There was also a disruptive impact on some of the work of the investigation team: for example, investigators were not generally able to travel across provincial borders to seek out and consult potential witnesses," he said.

He said the commission was almost done hearing oral evidence and was hoping to use most of the extension period, if granted, to write the report. He said it was in the public interest to grant the extension because if it was not granted, "the commission will be denied the opportunity to prepare its report" for the president.

"It would be untenable for the commission to have been allowed to hear all the evidence it has heard since 2018 and deny it the opportunity to prepare and submit a report to the president. This would, I believe, clearly not be in the public interest," Zondo added.

The court agreed, paving the way for the inquiry to complete its hearing of oral evidence from a number of high-profile witnesses – including President Cyril Ramaphosa, former spy boss Arthur Fraser and former finance minister Malusi Gigaba.

Former president Jacob Zuma, who faces a two-year jail term if he fails to testify at the inquiry and provide it with evidence, has yet to indicate whether he will return to the commission. He has until 31 March to do so.

South Africa's official unemployment rate increased by 1.7 percentage points to 32.5% in the fourth quarter of 2020, the highest since Statistics South Africa (Stats SA) started publishing its Quarterly Labour Force Survey in 2008.

Stats SA reports that the number of employed persons increased by 333 000 quarter-on-quarter to 15-million in the fourth quarter of 2020, while the number of unemployed persons also increased by 701 000 to 7.2-million.

The number of discouraged work-seekers increased by 235 000 and the number of people who were not economically active for reasons other than discouragement decreased by 1.1-million.

Stats SA points out that the unemployment rate, according to the expanded definition, had decreased by 0.5 of a percentage point to 42.6% in the fourth quarter.

Former president Jacob Zuma will finally have his day in court after the KwaZulu-Natal High Court in Pietermaritzburg heard on Tuesday that his corruption case was finally ready for trial.

Well over a decade in the making, the case overcame a final few hurdles, including a review application from Zuma's co-accused, French arms company Thales.

But eventually, the matter was certified trial ready for the period 17 May to 20 June. Further particulars were put to rest in the brief court session.

Zuma and Thales are accused of colluding in the now infamous arms deal. Zuma's financial advisor, Schabir Shaik, was convicted of soliciting a bribe for Zuma.

Both Zuma and Thales face charges of fraud, racketeering, corruption and money laundering relating to the controversial multibillion-rand arms deal.

Senior State advocate Billy Downer said all parties agreed to postpone the matter after Thales' review application to have the racketeering charges thrown out. The review was unsuccessful.

Downer said there were more than 200 witnesses on the State's list.

He added that there were Covid-19-related issues, but it was agreed that the matter could still move forward.

He said:

As far as the issue of holding the trial and the Covid-19 consequences, we know that with lockdown and travel restrictions to and from SA, it is affecting witnesses living overseas. It remains a consideration. We are not sure what is going to happen further. We all agree we are ready for trial.

"It is merely a question of setting the trial date."

Downer said he spoke to representatives of the office of the KwaZulu-Natal Directorate of Public Prosecutions and was told that 17 May was an acceptable date.

Neither Zuma nor any of his usual supporters were in court on Tuesday. Bishop Vusi Dube, the chief organiser for supporters on the ground during the corruption matter, told News24 they would mobilise when the trial commenced.

This week, News24 reported further legal woes for Zuma when the Zondo commission sought an order that Zuma be found guilty of contempt and that he should be sentenced to two years behind bars.

They also want Police Minister Bheki Cele and national police commissioner Khehla Sitole to be ordered "to take all steps as may be required to give effect" to that order.

The commission turned to the Constitutional Court after Zuma defied its 28 January ruling which ordered him to appear before commission chairperson, Deputy Chief Justice Raymond Zondo, to answer questions that did not implicate him in specific criminal conduct.

Zuma refused and compared the Constitutional Court's ruling to the apartheid state's targeted persecution of PAC leader Robert Sobukwe, whose jail term was repeatedly and unlawfully extended under the so-called "Sobukwe clause".

News24 reported that when Zondo announced the inquiry would lodge a contempt of court application against him and seek his imprisonment after he defied a summons for him to appear before it from 15 to 19 February, Zuma effectively accused him and any judge who had ruled against him of bias or corruption – without any evidence.

The National Prosecuting Authority (NPA) says former president Jacob Zuma's court appearance on Tuesday was never set down as the start of his corruption trial.

This comes after the JG Zuma Foundation released a statement in which it said it hoped that the judiciary would not tolerate any further postponements in the criminal trial of Zuma and his co-accused, French arms company Thales.

"While we as the foundation, doubt the bona fides or readiness of the State to ever run this case, we hope our judiciary will not tolerate any further postponement beyond the date," the statement read.

The foundation further noted that the State said it would be ready to start with the on 17 May 2021.

In addition, it claimed that "these postponements" carry on Zuma's "right to be continuously violated and the narrative that he is guilty continues"."We hope that the judiciary will not tolerate any further abuse of the process. Indeed justice delayed is justice denied and this has been [former president] Zuma's lived reality and experience of the criminal justice system," the foundation said, adding that it will continue to ask the judiciary to strike this case off until the State is ready.

Earlier this month, News24 reported that the trial of Zuma and Thales could start as soon as May, after the arms dealer indicated it would not fight a ruling dismissing its attempt to have the racketeering charge it faces thrown out.

On Sunday, the NPA stated that it was "exceedingly disingenuous" to pretend that the trial was set down for 23 February.

The prosecuting authority further noted that when the matter was postponed last year, the court said: "The matter is provisionally to February 23, for the resolution of the following outstanding pre-trial management issues with a view to the court at the provisional hearing on February 23, 2021 certifying the matter as trial ready in accordance with the judge president's pre-trial hearing directives dates November 7,8 [2020]."

In an earlier report, NPA spokesperson Sipho Ngwema told News24: "Indeed, we are pleased with the news that Thales has elected not to appeal the dismissal of its challenge to the racketeering charge. We are delighted also that the State and Thales are ready for trial fairly soon, in the next three months or so."

The case is back in the KwaZulu-Natal High Court on Tuesday when a date for the start of the trial is expected to be set.

President Cyril Ramaphosa said on Monday that while the defence force is the only lawful military force in the country, the responsibility to defend the country’s democracy and uphold its Constitution rests with each individual.

He added that the country’s democratic Constitution is the product of years of sacrifice and struggle with many South Africans having endured pain and hardship, and many losing their lives, to ensure a democratic society with equal rights.

“We should therefore be concerned when those who occupy prominent positions in society make statements that demonstrate a disdain for the basic principles of our Constitution and the institutions established to defend our democracy,” said Ramaphosa.

As Commander-In-Chief of the country’s armed forces, Ramaphosa, on Sunday, officiated at the annual celebration of Armed Forces Day in Cape Town, to remember the sinking of the SS Mendi in 1917, where more than 600 black South African soldiers and 30 crew lost their lives.

He said without Constitutional checks and balances the country’s democracy was vulnerable and worthless.

Ramaphosa said of particular concern were recent utterances directed at the judiciary, in which some judges were accused, without any evidence, of pursuing interests other than the cause of justice.

He said such claims were deeply disturbing and, if true, it would mean that there were some within the judiciary who were failing to uphold the values and principles with which they had been entrusted.

“Fortunately, our Constitution makes provision for such a possibility. The National Assembly is empowered to remove judges who are found by the Judicial Service Commission to be guilty of gross misconduct. The Judicial Service Commission is a carefully constituted body, which includes representatives from the judiciary but also the legal profession, academia and Parliament. There are clear processes established in law to deal with allegations of misconduct against members of the judiciary,” he explained.

Rampahosa said anyone who had evidence of any wrongdoing by any judge should make use of the avenues provided in the country’s Constitution and in its law to ensure that appropriate action was taken.

He went on to explain that without evidence though, and unless referred to the relevant authorities, all allegations do is undermine the judiciary's democratic function.

“We should therefore not take attacks on the judiciary lightly. Such attacks shake the very foundations of our constitutional democracy. Unless supported by evidence, such claims undermine confidence in our courts, and weaken our constitutional order. We interfere with the functioning of our courts and weaken the rule of law when we attack the judiciary. Our failure to implement our courts’ injunctions weakens our constitutional democracy,” Ramaphosa said.