Latest news with #R1.03
IOL News
2 days ago
- Business
- IOL News
Construction industry sees green shoots of growth off a low base - BER's Lemboe
South Africa's construction sector, long mired in stagnation and underperformance, is beginning to show green shoots of recovery off a low base, South Africa's construction sector, long mired in stagnation and underperformance, is beginning to show green shoots of recovery off a low base, according to Craig Lemboe, the deputy director at the Bureau for economic Research (BER) speaking at Construction Industry Business Breakfast held on Wednesday. While the industry remains well below pre-pandemic output levels and continues to suffer from weak capital investment and low business confidence, recent survey data suggests that "green shoots" may be taking root. Lemboe said for most of last year, saw the non residential sector was starting to show a little bit more growth and more potential than the residential sector. However, this was from a more eroded base as it's 50% smaller than what than what it was 10 years ago. "We also see from our civil contractors survey that activity, particularly among large contractors, is doing quite well. So there is this idea that we are starting to see some larger infrastructure projects to come on board, and that the contractors are starting to see this, both in terms of the current activity, but also in terms of the activity going forward," he said. South Africa was starting to see some larger infrastructure projects to come on board. Despite these promising indicators, Lemboe cautioned that systemic barriers persist. Long delays in municipal approvals, chronic late payments by public entities, and uncertainty around infrastructure funding continue to hamper sustained recovery. The Western Cape province stood out as a bright spot, with above-average construction activity and stronger investor sentiment. Still, nationally, overall building sector confidence remains low, with 75% of residential builders expressing dissatisfaction with prevailing conditions. Another positive to support growth ahead, was the Budget 3.0 announcement of R1.03 billion allocated for infrastructure. However, Lemboe said while it "is a welcome announcement, there are a number of caveats that we are very weary of at the BER." A large chunk of this spend is being filtered through state-owned enterprises, but there isn't a lot of clarity on where the income is going to come from, where the capital is going to come from, in order to find these projects. Also a portion of the funds comes through provinces and municipalities, and municipalities are known to be weak on capital expenditure. Ramokgopa Meanwhile, Minister in the Presidency for Planning, Monitoring and Evaluation, Maropene Ramokgopa, also speaking at the event, said South Africa is accelerating plans to transform the country into a "construction site" through a sweeping infrastructure drive that aims to tackle unemployment, stimulate inclusive growth, and reduce the high cost of living, . Ramokgopa pointed to the government's Medium-Term Development Plan (MTDP) for 2024–2029, which commits to deliver n the established investment pipeline. "Increasing public infrastructure spending requires stimulating private sector investment that will enable industrialisation and supporting job creating in the country," she said. The government has committed over R943.8 billion to public infrastructure over the medium term, with a strong emphasis on crowding in private investment through public-private partnerships. However, public infrastructure spending currently accounts for just 3.8% of GDP, well below the 10% target set. Ramokgopa said South Africa's national development was linked to that of the African continent. "Infrastructure must drive regional integration, promote and support industrialisation across Africa as a region. We are advancing collaboration and partnership in accelerating regional infrastructure projects through an African Union's presidential infrastructure champion initiative," she said BUSINESS REPORT
The Citizen
3 days ago
- Business
- The Citizen
Increased risks of cyberattacks, limited skills among Sapo's challenges
The Sapo aims to move from a loss of R1.03 billion in 2025 to a net profit of R1.48 billion in 2029. The South African Post Office (Sapo) has a plan in place to turn its business around by 2029. However, several hurdles remain that it must overcome to reach its goals. In 2023, the state-owned enterprise entered business rescue with R8.7 billion in outstanding debt to creditors. It requested a R3 billion bailout at the end of 2024 to avoid liquidation, but National Treasury decided against the move. ALSO READ: Post Office rescue plan is working, but more money is needed For the financial year 2024-25, Business Rescue Practitioners (BRP) managed to pay creditors R1 billion. On Tuesday, Sapo presented its corporate plan to the Portfolio Committee on Communications and Digital Technologies, outlining its strategy for turning things around over the next five years. Sapo's corporate plan Acting CEO Fatima Gani stated that the entity is exploring the formation of partnerships with e-commerce platforms and small to medium-sized enterprises (SMEs) to unlock new revenue streams. Public-private partnerships would also help modernise Sapo infrastructure without requiring full privatisation, she said. The Sapo hopes to reach the R5 billion mark in revenue; however, this can only be achieved with the help of investments. ALSO READ: Union fights liquidation of Sapo while govt says it cannot bail it out 'If we had to achieve this revenue stream, there needs to be an investment, whether it's through a partnership, capital injection, equity injection, or raising funds on our own. We need those investments to make Sapo fit for business, to achieve a diversified revenue stream,' said Gani. 'We are forecasting to be breaking even around 2027–2028, which means working capital stress that we feel, and we keep on coming back to the government to say please help us fund this organisation, will fall away as we are on our investments from our diversified revenue stream.' Market threats Among other threats, Sapo will have to outplay increasing competition from more agile and technologically advanced private sector operators amid a decline in demand for traditional postal services. It will have to find growth amid weak economic conditions and increasing business costs, which will negatively impact Sapo's operational costs. There is also a threat of an increase in cyberattacks, which have recently targeted the public sector. Security costs are expected to increase by 6% per annum due to network expansion over the next five years. ALSO READ: Ramaphosa signs Post Office Bill into law 'This one keeps me awake at night, as it is relevant, and we have seen it happening in the public and private sectors. Unfortunately, if the very clever people put their minds into something positive, we would be ahead of this, but these very clever people join the dark side of the world,' said Gani. 'They are always a step ahead. How do you stay on top of cyberattacks? As a national asset, we hold critical information regarding citizens, including their personal information, residences, and addresses. This is something that keeps me awake at night.' Escalating operational costs, including employee wages, transport, and security services, exacerbate Sapo's financial distress. Employee salaries Last month, Sapo and the Unemployment Insurance Fund (UIF) reached an agreement to fund employee salaries for the last half of the year. The Ters scheme will inject R381 million to assist 5 956 employees. Gani lamented that the Sapo's slow pace to embrace digital transformation has limited its ability to compete effectively with the private sector. This is in addition to the limited skills to transform and modernise the entity 'We have multiple vacancies from a leadership perspective. We have limited skills internally.' The Sapo aims to move from a loss of R1.03 billion in 2025 to a net profit of R1.48 billion in 2029. READ NEXT: More millions to save jobs at SA Post Office
IOL News
22-05-2025
- Business
- IOL News
South Africa to invest over R1 trillion in infrastructure over three years
Of the R1.03 trillion to be allocated to public infrastructure, Finance Minister Enoch Godongwana said a total of R402 billion goes towards major allocations to roads, R219.2 billion to energy, as well as R33.7 billion to water and sanitation. Image: Armand Hough / Independent Newspapers INVESTING R1 trillion on roads, rail, energy, and water over the next three years demonstrates the government's resolve to change the composition of spending from consumption to investment, says Finance Minister Enoch Godongwana. The budget document said of the R1.03 trillion to be allocated to public infrastructure, a total of R402 billion goes towards major allocations to roads, R219.2 billion to energy, as well as R33.7 billion on water and sanitation. Of the R402 billion for transport and logistics, R93.1 billion is for the South African National Roads Agency to keep the 24,000 kilometre national roadwork in active maintenance and rehabilitation. A total of R53.1 billion was for the maintenance and refurbishment of provincial roads. 'These investments will maintain our extensive road network in good condition allowing easy access and movement of freight and people within the country and beyond,' he said. He said allocations towards capital payments remained the fastest-growing area of spending by economic classification. 'Public infrastructure spending over three years will exceed the R1 trillion mark. This spending will focus on maintaining and repairing existing infrastructure, building new infrastructure and acquiring equipment and machinery,' he said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The infrastructure spend will focus on transport and logistics, energy and water and sanitation. Godongwana also said R66.3 billion is allocated to the Passenger Rail Agency of South Africa (Prasa), with R18.2 billion meant for the rolling stock fleet renewal programme and R12.3 billion is provisionally allocated for the renewal of the signaling system. 'The spending will sustain progress in rebuilding the infrastructure to provide affordable commuter rail services. This will enable Prasa to increase passenger trips from 60 million in 2024/25 to 186m by the end of the Medium Term Expenditure Framework.' The Minister said the energy sector will invest R219.2 billion on strengthening the electricity supply network, from generation to transmission and distribution. The water and sanitation sector will spend R156.3 billion on expanding water resource and service infrastructure including dams, bulk infrastructure to service mines and factories. Godongwana told MPs that the National Treasury continued to implement reforms that will facilitate greater private sector participation in public infrastructure. The new regulations for public-private partnerships (PPPs) were gazetted earlier this year and will take effect in June. 'The National Treasury has developed enabling guidelines and frameworks to support the new regulations,' said Godongwana, adding that the guidelines and framework will be published in the coming weeks. The budget documents said a single structure overseen by the National Treasury will be established during 2025/26 to coordinate state participation in project preparation and planning, public-private partnerships (PPPs), funding and credit guarantees. 'It will consolidate two units currently in the Government Technical Advisory Centre that coordinate PPPs and capital appraisals with the Infrastructure Fund in the Development Bank of Southern Africa.' It also said PPP regulations have been streamlined, reducing approval requirements for projects below R2 billion from June 2025. 'A clear framework is being established to receive and process unsolicited PPP proposals or bids from the private sector. Revised manuals and guidelines on PPPs are being produced and will be made available to the public.' Cape Times
IOL News
21-05-2025
- Business
- IOL News
Budget: South Africa to invest over R1 trillion in infrastructure over three years
Of the R1.03 trillion to be allocated to public infrastructure, Finance Minister Enoch Godongwana said a total of R402 billion goes towards major allocations to roads, R219.2 billion to energy, as well as R33.7 billion to water and sanitation. Image: Armand Hough / Independent Newspapers More than R1 trillion will be spent on infrastructure investment on roads, rail, energy, and water over the next three years. Delivering his Budget speech, Finance Minister Enoch Godongwana said the 2025 budget demonstrated their resolve to change the composition of spending from consumption to investment. Godongwana said allocations towards capital payments remained the fastest-growing area of spending by economic classification. 'Public infrastructure spending over three years will exceed the R1 trillion mark. This spending will focus on maintaining and repairing existing infrastructure, building new infrastructure and acquiring equipment and machinery,' he said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading The infrastructure spend will focus on transport and logistics, energy and water and sanitation. The budget document said of the R1.03 trillion to be allocated to public infrastructure, a total of R402 billion goes towards major allocations to roads, R219.2 billion energy, as well as R33.7 billion on water and sanitation. According to Godongwana, of the R402 billion for transport and logistics, R93.1 billion is for the South African National Roads Agency to keep the 24,000 kilometre national roadwork in active maintenance and rehabilitation. A total of R53.1 billion was for the maintenance and refurbishment of provincial roads. 'These investments will maintain our extensive road network in good condition allowing easy access and movement of freight and people within the country and beyond,' he said. Godongwana also said R66.3 billion is allocated to the Passenger Rail Agency of South Africa (Prasa), with R18.2 billion meant for the rolling stock fleet renewal programme and R12.3 billion is provisionally allocated for the renewal of the signaling system. 'The spending will sustain progress in rebuilding the infrastructure to provide affordable commuter rail services. This will enable Prasa to increase passenger trips from 60 million in 2024/25 to 186m by the end of the Medium Term Expenditure Framework.' The Minister said the energy sector will invest R219.2 billion on strengthening the electricity supply network, from generation to transmission and distribution. The water and sanitation sector will spend R156.3 billion on expanding water resource and service infrastructure including dams, bulk infrastructure to service mines and factories. Godongwana told MPs that the National Treasury continued to implement reform that will facilitate greater private sector participation in public infrastructure. He said the new regulations for public-private partnerships (PPPs) were gazetted earlier this year and will take effect in June. 'The National Treasury has developed enabling guidelines and frameworks to support the new regulations,' said Godongwana, adding that the guidelines and framework will be published in the coming weeks. The budget documents said a single structure overseen by the National Treasury will be established during 2025/26 to coordinate state participation in project preparation and planning, public-private partnerships (PPPs), funding and credit guarantees. 'It will consolidate two units currently in the Government Technical Advisory Centre that coordinate PPPs and capital appraisals with the Infrastructure Fund in the Development Bank of Southern Africa.' It also said PPP regulations have been streamlined, reducing approval requirements for projects below R2 billion from June 2025. 'A clear framework is being established to receive and process unsolicited PPP proposals or bids from the private sector. Revised manuals and guidelines on PPPs are being produced and will be made available to the public.' The document said state-owned companies, public entities, and municipalities will fund 72.7 per cent, which total R748.5 billion of total public-sector capital investment from their budgets. 'For the 2025 Budget cycle, the Budget Facility for Infrastructure has approved nine projects with a total value of R55.5 billion, of which R15.3 billion will be funded by the Facility, supporting critical areas such as hospital infrastructure, transport and logistics and water.' It added that the 2025 Budget introduces a performance-based conditional grant for certain trading service entities that provide basic services, such as municipal water. 'This will incentivise financial and operational reforms to improve their functioning and sustainability.'
Zawya
21-04-2025
- Business
- Zawya
South Africa: MTN Group nets $30mln from sale of 1.5bn shares in Ugandan subsidiary
South Africa's MTN Group Ltd made a net gain of R564 million ($29.76 million) from the sale of its 1.57 billion shares in the Ugandan subsidiary despite offering the stake at a substantial discount in a bid to comply with a requirement to offload a minimum stake of 20 percent to minority investors. Latest disclosures through the company's audited financial statements (2024) show that the proceeds generated from the sale of the shares (net of taxes and transaction costs) amounted to R1.03 billion ($54.67 million) resulting in a net gain of R564 million ($29.76 million).'Proceeds generated from the sale of shares, (net of taxes and transaction costs) amounted to Ush214 billion (R1 036 million). This resulted in a net gain of R564 million recognised in equity as a transaction with non-controlling interests,' the group says. The group disposed of 7.03 percent stake equivalent to 1. 57 billion shares in MTN Uganda as part of its localisation plan that reduced its shareholding in the subsidiary to 76.02 percent from 83.05 percent. The transaction which was completed in June last year (2024) came after the group managed to sell a 12.97 percent stake in MTN Uganda in November 2021 through an initial public offering (IPO) that was priced at Ush200 ($0.05). The share sale in the secondary market aimed to help MTN comply with Uganda's local ownership rule that requires foreign telcos operating in the country to cede at least 20 percent shareholding to the public through the stock market. The offer which ran between May and June 10, 2024, was priced at discount of Ush170 ($0.04) per share compared to the original IPO price of Ush200 ($0.05) per share. The company also offered 30 free shares for every 140 shares allocated with the incentive shares amounting to a significant discount and making the secondary offer more generous than the IPO. Consequently, the sale of the additional shares was oversubscribed by 2.3 times, receiving subscription of three billion shares, reflecting the impact of the incentives that included free shares. In 2019 the Ugandan government directed foreign-owned telecoms operating in the country to list at least 20 percent of their shares on the local bourse within two years to boost Ugandan ownership in the sectorThe policy shift put pressure on multinationals operating in the country such as MTN, Airtel and Lycamobile to sell shares to the public. President Yoweri Museveni complained that the country was draining its scarce foreign exchange reserves through foreign-owned telecoms repatriating their profits abroad. Last year Airtel Africa Plc disclosed that it will also sell additional shares amounting to a 9.11 percent stake in its Ugandan subsidiary through a secondary offer to comply with Kampala's listing requirements. The multinational in November 2023 managed to sell 4.35 billion shares equivalent to a 10.89 percent stake in Airtel Uganda's initial public offering (IPO) and failed to meet the ownership rule. Airtel Africa said it had received a regulatory extension to sell the balance of 3.64 billion shares by November 2026, a move that will see it replicate MTN group which successfully offloaded a 20 percent stake in MTN Uganda in two transactions including a secondary offer conclude in June 2024Airtel Africa sold its shares at a price of Ush100 ($0.02) per share in the IPO that also offered incentive shares on a band subscription volume to attract investors. Retail investors who applied for more than 2,500 shares, for instance, received 10 free shares for each 100 shares allocated while institutional investors who applied for at least 1.85 billion shares were offered 112 free shares for each 100 shares allocated. MTN group's operations in the continent have faced several challenges including the conflict in Sudan's capital Khartoum which started on April 15, 2023, between Sudanese Armed Forces and the Rapid Support Forces leading to the destruction of state-owned infrastructure in the city. The ongoing conflict in Khartoum has resulted in loss of revenue and earnings for MTN's subsidiary due to prolonged hyperinflationary environment leading to an impairment of R11. 72 billion ($618.66 million) relating to MTN Sudan's non-current assets.'Accordingly, the future economic benefits that can be derived from MTN Sudan's operations have declined,' the group says. Last year (2024) the group gained R1.3 billion ($68.61 million) from the sale of subsidiaries in Afghanistan and Guinea-Bissau and a loss of R1.9 billion ($100.27 million) on the sale of a subsidiary in Guinea-Conakry. The sale of MTN Guinea-Bissau and MTN Guinea-Conakry was concluded on August 1, 2024, and December 30, 2024, respectivelyThe group also disposed of 686 million shares in MTN Ghana to Ghanaian citizens as part of the Group's localisation strategy reducing the group's shareholding to 73.99 percent from 81.04 percent. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. ( James Anyanzwa
