Its recent financial results showed that the mobile phone company cost its parent group Blue Label Telecoms R600 million as part of a loan, debt-funding and reinvestment for the year ended May, and many analysts doubt its survival in the face of rising debt and a loss of subscribers.

Cell C entered the market in 2001, seven years after Vodacom and MTN, and comfortably owned the third position for a while until fixed-line operator Telkom decided to venture into the mobile space. For years now, Cell C has been meandering aimlessly and making losses in its airtime-selling business.

“Certainly for Blue Label, Cell C has been a fair bit of a disaster business. I didn’t like the transaction when Blue Label did it, it wasn’t a good transaction. Blue Label was a quality business, and I didn’t see how this particularly added value for it,” independent analyst Simon Brown said. 

In 2017 the Mail & Guardian reported how Cell C was effectively bought with its own airtime. The company bought R2.5  billion worth of its own airtime from Blue Label Telecoms, which immediately used the money to fund a large part of its acquisition of a big stake in Cell C.

After first buying a 45% stake in Cell C in August 2017, Blue Label owned 49.53% of the operator after a recapitalisation in September 2022. In April this year, Blue Label acquired an additional 4.04%, bringing its total interest in Cell C to 53.7%.

The Competition Commission approved the move, saying the transaction did not raise public interest concerns. Brown said the only way to save Cell C now would be to sell it either to Telkom or MTN. But, he added, he had doubts that the Competition Commission would allow it. 

“South Africa does not need four telcos. If you look at America with populations five or six times our population, that’s when you have three telcos. I don’t know that our market is big enough for four telcos, mobile operators, to stand on their own,” Brown said.

The fact that Blue Label keeps bailing out Cell C is not sustainable, he added.

“At some point, if nothing else, Blue Label will run out of money. At some point the board needs to say, hang on, we’re giving north of R200  million a year to this company. Is there an end in sight where they can start ultimately giving us R200  million from profit? If not, why are you doing it, because it makes no sense whatsoever?

“If they were to sell it to Telkom, they would realise a better value for if. Or if Cell C were to buy the Telkom mobile business, but Cell C hasn’t got the cash and Telkom wouldn’t sell. So the way it would have to work is if Telkom was to buy Cell C and merge that into its mobile offering.”

Financial difficulties 

Struggling with nearly R10  billion in debt, Cell C has faced mounting financial problems, finding it hard to rein in its escalating 

obligations. In its annual results, it said core headline earnings per share slid by 34% to 68.66 cents a share compared with the prior year.

As part of the recapitalisation programme it embarked on in 2022 and to further assist with its working capital requirements, Blue Label was obligated to purchase R1.2  billion of additional prepaid airtime through four quarterly payments of R300  million each.

The Cell C business was not sustainable before the recapitalisation, said Peter Takaendesa, head of equities at Mergence Investment Managers.

“The balance sheet was completely impaired and competing with MTN and Vodacom from a capital expenditure perspective without another business to lean on was never going to work,” he said. 

Another problem for Cell C has been its decision not to compete in terms of capital investment and not running or building its own towers, instead relying on MTN and Vodacom.

In 2023, Cell C said it had completed its network migration, which included switching off all its tower infrastructure and handing over the building and operation of its cellular network to MTN. 

MTN provides Cell C with access to a virtual radio access network for its prepaid and mobile virtual network operator (MVNO) subscribers. An MVNO is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. Mobile virtual network operators that run on Cell C include Standard Bank Mobile, FNB Connect, Shoprite K’nect and Capitec Connect.

Takaendesa said Cell C is effectively using the money it should have invested in infrastructure to buy capacity from MTN and Vodacom. Technically, this should be to Cell C’s benefit, because it can adjust the capacity it wants on a needs basis, but MTN is starting to contract with MVNOs directly and not through Cell C.

“I think it’s very likely Vodacom will also start offering one or two MVNOs on its networks. 

“What you have now is a business that is fully reliant on Vodacom and MTN, yet competing with them at the same time. That is not a winning method,” Takaendesa said. 

For now Cell C is probably not concerned about its future because of the sustenance from Blue Label, but for how long, remains to be seen.

“It is reliant on that funding. So, there will be someone who makes sure it survives, but for how long?” Takaendesa wondered.

Nedlac was established in 1995, shortly after the end of apartheid, as a platform for dialogue between the government, business, labour and community organisations. 

By providing a structured environment for these stakeholders to collaborate, Nedlac has played a role in shaping South Africa’s post-apartheid economic and social landscape.

But said Cas Coovadia, the chief executive of Business Unity South Africa, “more work needs to be done to consider whether Nedlac is fit for purpose in the current environment and for the challenges that lie ahead”.

In 2021 the Nedlac executive council established a governance task team to review the council’s founding documents, including the Nedlac Act and the Nedlac constitution. 

“We believe this should have been done earlier — to look at Nedlac’s progress, relevance and positioning. We believe it’s critical,” Coovadia said. 

Some of the work done by the council has included the consideration of legislation such as the Companies Bill (2019), the Competition Amendment Bill (2008 and 2018) and the National Health Insurance Bill (2019).

Nedlac has also brought parties together such as the Electricity Summit, which led to a Nedlac Accord (2008); the development of the Framework for South Africa’s Response to the International Crisis (2009); the Social Compact to support Eskom (2020); and the Covid-19 Nedlac Rapid Response Task Team (2020 – 2022).

Coovadia said in the past 30 years the world and the issues that governments have to  contend with have changed and Nedlac must evolve accordingly.

“The current economic trajectory, which will gain momentum every year, is that of an economy that is characterised by artificial intelligence, digitalisation, hybrid ways of working and diverse ways of work. These are critical changes and Nedlac needs to review how it will remain relevant and what it needs to do,” he said. 

Raymond Parsons, an economist at the North-West University Business School and a former convenor of Nedlac, concurred, saying there was a huge challenge ahead for Nedlac to reform.  

“We’ve heard that there are plans to restructure, adjust the operation of Nedlac. It’s quite clear that given the challenges we have identified, Nedlac has to be fit for purpose in the next few years. The ingredients that are part of that, making Nedlac fit for purpose, would be firstly to be proactive and to be relevant,” Parsons said

But labour federation Cosatu’s parliamentary coordinator Matthew Parks disagreed with the notion that Nedlac is losing its relevance. 

“Nedlac is more relevant than ever before. It is still workable to address issues of today. We would be far worse off if we didn’t have it, it’s helped to address many issues,” he said on the sidelines of Friday’s summit.

“Government on its own doesn’t have all the ideas or the capacity, business doesn’t have the political muscle and labour doesn’t really have money but we can help bring on board workers. There are always issues but there’s progress.”

According to Statistics South Africa, GDP expanded by 0.4% in the period under review after failing to grow in the first three months of the year, a period that was still marked by power outages. Stats SA revised the first quarter number up slightly, having earlier reported a 0.1% contraction. 

There was no load-shedding in the second quarter, which helped the electricity, gas and water supply industry. The sector increased by 3.1%, driven by higher electricity generation and water distribution, according to Stats SA. 

The country has had 161 straight days without power cuts and only 83 days of load-shedding this year, according to The Outlier. 

“If we ignore the topsy-turvy economic environment caused by the pandemic in 2020, the 3.1% growth rate represents the sharpest increase since the third quarter of 2008 [also 3.1%],” Stats SA said in a statement. 

Seven out of 10 industries contributed to the positive second quarter data, including finance, real estate and business services, manufacturing, trade, accommodation and catering, as well as construction.

The 0.4% expansion matched Standard Bank’s forecast for the second quarter and was also supported by some improvements in the logistics sector, particularly in the railway and port operations, head of South Africa macroeconomic research Elna Moolman said in a note.

“Most sectors expanded so this was a broad-based expansion,” she said, noting that towards the end of the quarter there were key political developments with the formation of a government of national unity (GNU) after 29 May general elections and the appointment of the new cabinet. 

“Since then the economic prospects have generally improved,” Moolman added.

Ahead of Tuesday’s GDP data release, economists at Nedbank predicted that the worst of the economic downturn was over, and also correctly forecast 0.4% growth for the second quarter.

“We expect the economy to fare better in the second half of the year,” the bank said, adding that resolving the country’s energy and logistical constraints remained the key to unlocking faster growth over the medium to longer term. 

“While the GNU has ushered in renewed optimism, this needs to translate into accelerated structural reforms to enhance the international competitiveness of industry, thereby enabling the economy to grow faster and create more jobs without hitting supply bottlenecks, driving up costs and stoking inflation,” Nedbank said.

Motorists will also pay less for diesel, which is set to decrease by 79 cents to R1.05 a litre.

The price of illuminating paraffin will also decrease by R1.03 a litre. 

This is the fourth consecutive month of decline in petrol prices from about R25.15 a litre in May, largely on the back of lower Brent crude prices.

South Africa adjusts its fuel prices each month, based on the global oil price and the rand exchange rate.

According to the department, the average Brent crude oil price decreased from $83.55 to $78.54 a barrel, during the period under review. This was a result of increased production from major oil-producing countries. 

The rand also strengthened, from an average of R18.23 to the dollar over the past month to R18.05. 
These adjustments will bring the price of petrol in South Africa’s inland areas down to R21.79 a litre for the 93 octane grade, and R22.19 a litre for 95 octane.

South Africa has 11.4 million prepaid meters in all, out of which Eskom is responsible for updating 6.9 million while municipalities are responsible for 4.5 million.

According to a dashboard that Eskom maintains, nearly four million of its meters have been updated, and there are just over 80 days left to process the rest before they stop working. The South African Local Government Associatio’s (Salga’s) dashboard shows that 3.5 million (77%) meters are updated with just over a million still needing to be re-coded. 

In a separate update on the process, Eskom said it was “progressing well” with 54% of its meters having been updated as of 15 May.

If any meter is not upgraded by 8:15pm on 24 November, it will continue to disperse electricity until the existing credit is depleted, said Silas Mulaudzi, a sustainable energy specialist at Salga.

“Once it is depleted it will stop working and the consumer will be in the dark,” he said. “In that instance the customer should go to the municipality or to Eskom, depending on the electricity supplier for the area, and ask for the key-change token which will then allow them to input the credit token and have electricity post the expiry date.” 

If a customer cannot go to the municipality or to Eskom — for those whose electricity is supplied by the utility — then they can call them to re-code the meter.

The meters need to be upgraded or re-coded because they use a particular technology called Standard Transfer Specification that allows the distributor, Eskom, to process the electricity generated at compliant vending systems, Mulaudzi explained.

“This technology was invented in 1993 and has a lifespan of 31 years. In 2024 the 31 years would have come to an end and it will need to be upgraded so it continues to disperse electricity,” he said. 

The software is being converted to a base date of 2014, with another lifespan of 31 years, meaning that in 2045 the process will have to be repeated, Mulaudzi said.

He added that in some cases, faulty meters needed to be replaced. 

“We have just over a million that we still need to re-code. We absolutely can do this by November,” he said. 

Asked why Eskom and municipalities had left it this late to complete the updates, Mulaudzi said this was because of a “slow uptake” as well as financial constraints.

“In 2018, with our partner the Standard Transfer Specification Association, which owns the technology, we sent communication to municipalities telling them that they need to start planning on how they are going to upgrade meters. The communication has been there but there was slow uptake over the years,” he said.

“During Covid-19 we had a lot of workshops about this but there was slow uptake. Now we realise we need to move swiftly. There have been a lot of barriers such as finance to fund it and procurement issues so it finally picked up late in 2022, early 2023,” Mulaudzi said. 

He could not say exactly what the rand cost of this programme will be, because some municipalities do the update themselves and others call service providers, or use both approaches.

“There are some financial requirements. These service providers who recode the meter charge R40 per meter and this is a 2021 figure. In a situation where the service provider had to change a meter because it is faulty that was R100 per meter in 2021. I am not sure what it costs now but you can understand the financial implications,” Mulaudzi said. 

There are two ways to upgrade meters that are not faulty. Customers can do it themselves by getting two re-code tokens from their prepaid electricity vendor, which must then be keyed into the meter. Alternatively, customers can wait for Eskom or their municipality to do the update. 

 Dale McKinley, a political analyst at the International Labour Research and Information Group, said the process is simple, but there has been poor communication from Eskom and the municipalities on how to do it.

“It’s not a technical issue, per se, it’s more a communication issue and information issue,” McKinley said.

“Now they’ve left it so late, and then they try to squeeze in everything at the end, and then’ threaten people that they’re going to get cut off or they’re not going to have access, when, in fact, there should have been a longer term plan to do this over a longer period of time to make sure that everybody was on board.”

“There are north of three million meters that have not yet been updated with less than three months to go, “and that’s the concern”, he said.   

“Can you imagine a situation where those who still haven’t done this, and then all of a sudden the reader doesn’t work. What do you do? Where do you have to go? If there’s no communication, no plan at a local level, then people are going to get upset.”

The group is taking back 10 000 square metres from Pick n Pay during the 2024-25 financial year and will re-let it at better monthly rentals, said Nashil Chotoki,  Redefine Properties’ national asset manager for retail.

He was speaking at a capital markets event on Tuesday to explain the company’s strategy, sustainability, operations and financials to investors and stakeholders.

Redefine currently leases 73 116 square metres to Pick n Pay. 

“The driving factor in us taking back the space is the retail opportunity that lies within that space and we want to improve rental and trading densities on that space,” Chotoki said. 

Trading density is turnover generated over space leased. 

The 10 000 square metres Redefine is taking back from Pick n Pay is equivalent to one grocery store, leaving about six stores with the group. 

“Part of the agreement with Pick n Pay is that in the remaining stores, they need to upgrade those stores so that the offering now becomes competitive,” Chotoki said. 

Pick n Pay has faced difficulties recently. Its former chief executive, Pieter Boone, was asked to step down last year because the company was underperforming. And its founding Ackerman family earlier this year announced that it will forgo its majority shareholding in the grocery retailer.

“It’s no secret that Pick n Pay does underperform compared to the likes of Checkers,” Chotoki said. 

On Tuesday, Pick n Pay warned shareholders to expect a loss of more than 20% in its half-year to 25 August results which are to be published on 21 October. The group said its sales lagged as a result of the closure of 16 supermarkets during the period. 

“There is no purpose in living in the rear-view mirror. We must only look backwards to understand what went wrong and to make sure that we don’t repeat the mistakes of the past,” chairperson Gareth Ackerman said in a statement. 

“We all take accountability for the position we find ourselves in — one which developed over many years — and we all take accountability for the action required to rebuild and restore Pick n Pay.”

Redefine said it will also take back space from Ster-Kinekor because the cinema operator has been struggling. 

“In Ster-Kinekor we currently have six cinemas and those will be reduced to two. The space represents a specific opportunity for us to further increase our rent lending functions,” Chotoki said. 

Redefine said by doing this, income risk would be mitigated through re-letting. 

Ster-Kinekor announced in April the retrenchment of 236 workers. 

This was just over a year after it exited its business rescue process and narrowly escaped liquidation, resulting in 800 jobs being saved.

“The repurposing of the cinema space will be done in phases and so there will be an impact on vacancy during that process. The important part for us is that given the low rental base that Ster-Kinekor was on, if we re-let the space we can properly utilise it, which is where the opportunity lies for us,” Chotoki said.

“We still want to incorporate the entertainment aspect to our shopping centres and I think there’s great opportunities to traditionally repurpose the space for that purpose.”

In a statement, the utility said its expenditure for diesel from 1 April to 22 August 2024 was R3.59 billion, about 75% less compared with the same period last year. In rand terms this translates to R10.60 billion less than the R14.19 billion spent last year.

“Diesel consumption remains significantly below projected figures for this winter and is considerably lower than the past two years,” Eskom said. 

The utility noted that the use of diesel is still important in managing electricity demand during peak times, particularly during evenings from 5pm to 10pm. 

It  added that diesel usage remains below the year-to-date budget. 

According to Business Tech, Eskom’s diesel budget for 2024 was R23.38 billion. 

The Mail & Guardian reported that the National Energy Regulator of South Africa (Nersa) has called out Eskom for blowing more than half of its quarterly budget for diesel for the first quarter of the 2024-25 financial year in just one month.

At the time, critics suggested that the utility has caved in to political pressure to keep the lights on at all costs ahead of 29 May general elections.

In a parliamentary response in April, former public enterprises minister Pravin Gordhan said Eskom spent R64.78 billion in the past five years on diesel for its open cycle gas turbines. 

Recently, Eskom rebuffed critics saying improved energy availability factor (EAF) and planned maintenance has resulted in it burning less diesel and there being fewer blackouts.  

The utility said load-shedding has remained suspended for 150 consecutive days, with an uninterrupted power supply since 26 March 2024.

This is the longest period without power cuts since 2021. 

It maintained an average EAF of 68% over the past seven days, with the best-performing power stations — Kusile, Kendal, Majuba, Lethabo and Peaking — recording an EAF of 70%. 

Additionally, three other power stations achieved an EAF above 60%. 

“This improvement is due to the continued benefits of accelerating and executing planned maintenance, partnering with the original equipment manufacturers (OEMs), and the dedication of power station managers and their teams,” Eskom said. 

The power utility will announce its outlook for the summer period (1 September 2024 to 31 March 2025) on Monday, 26 August 2024.

The health industry skipped the signing at Union Buildings on Thursday because it said the contentious National Health Insurance (NHI), signed into law by President Cyril Ramaphosa earlier this year, was the central theme in the compact. 

Business Unity South Africa (Busa) said it had not signed the new version of the compact because the government had “unilaterally” amended and transformed “its original intent and objectives into an explicit pledge of support for the NHI Act”.

“These changes to the health compact were made without consultation,” Busa said in a statement.

Ramaphosa launched the health compact in 2019 as the collaborative effort of multiple stakeholders to overhaul the health sector in its entirety, the idea being that the broken system could not be fixed by the government alone.

The first iteration of the compact, which expired earlier this year, consisted of nine pillars, but a 10th pillar has been added for the newly signed second version.

The pillars are: development of human resources; improving access to medicine, vaccines and health products; upgrading infrastructure; private sector engagement; quality healthcare; public sector financial management improvements; governance and leadership; community engagements; information systems and pandemic preparedness.

“While reference was made to NHI in the previous version of the compact, it was only mentioned in the context of longer term developments. Busa has always supported a collaborative, workable NHI rather than the current single-fund model which is both unaffordable and unimplementable,” Busa said.

The business lobby group said it remained committed to supporting the projects and actions identified under the original version of the health compact, and building a strengthened and integrated health system that works for all South Africans.

“It’s disappointing that the initiative has been altered to endorse an NHI framework that many stakeholders, including ourselves, do not support because it is unworkable,” it added.

The Democratic Alliance (DA) — the former official opposition party which is now in a government of national unity — said the second health compact seems to circumvent the good faith of the first by making the NHI Act, the very vehicle many stakeholders staunchly opposed, as the foundation of the agreement. 

“This is nothing more than a ploy to coerce support for the NHI Act and silence opposition to a piece of legislation that will lead to the decimation of the health sector,” the DA said in a statement.

The presidency published a list of the signatories to the compact, which did not include Busa and the South African Health Professionals Collaboration (SAHPC), a lobby group of health professionals.

Signatories include Ramaphosa, the minister of health, the Independent Community Pharmacy Association, labour federation Cosatu, the South African Medical Research Council and Traditional Knowledge Systems and Allied Health. 

Busa chief executive Cas Coovadia told the Mail & Guardian that he had, after the first postponement of the signing of the compact, written to the director general in the presidency asking for further discussions but had not received a response.

SAHPC spokesperson Simon Strachan said the group of nine medical, dental and allied healthcare practitioners’ associations was not invited to the signing of the health compact. 

“To be clear, we are not signing this because it is not a reflection of the discussions that were had. The fact that it includes the NHI just makes it more distasteful. Using every avenue to garner support for the NHI is distasteful,” Strachan said.

The 33-year-old told the Mail & Guardian at the launch of the call centre that she felt lucky to get the job because she had started to lose any hope of employment.

The centre is an initiative by Vodacom and Unisa for the benefit of students and staff.

Nkosi was speaking about a week after the latest quarterly labour force survey from Statistics South Africa showed the unemployment rate increased to 33.5% in the three months from April to June, rising for the third consecutive quarter and reaching its highest rate in two years as several industries shed jobs.

The number of employed people decreased to 16.7 million in the second quarter, while that of jobless people increased by 158 000 to 8.4 million, Stats SA said. 

The expanded unemployment rate, which includes those who have given up looking for jobs, was at 42.6%.

The percentage of young people, those aged 15 to 34 years, who were not in employment or in education or training increased by 0.8 percentage points to 44.2% in the second quarter of this year from 43.4% during the same period last year.

Increasingly, desperate young job seekers like Nkosi, who are most affected by unemployment, are looking to the call centre industry, although for many it ranks very low on their list of preferred careers.

Also known as business process outsourcing or global business services, the call centre industry employs 85 000 people in the Western Cape alone, according to data from CapeBPO, a strategic business partner for the city.

The industry employs over 270 000 people in six South African cities, 65 000 of whom serve international clients, according to a report by management consulting firm McKinsey.

In another report for the three months ended March 2023, call centre industry body Business Process Enabling South Africa said 4 569 new jobs were recorded for the period, with the most growth being in KwaZulu-Natal, which accounted for 46.96% of new hires. The Western Cape was second at 37.61%, followed by Gauteng with 15.43%.

But many people fall into the call centre industry out of desperation, rather than choice, after being unemployed for some time, said Peter Andrew, the chief executive at CCI South Africa, one of the country’s largest international call centres with clients throughout Africa and across the world.

“It is not an aspirational job like a doctor or a lawyer. So, it is a stopgap to a certain extent. A lot of people come into the industry because of a lack of opportunities in other work due to experience, which is a factor that a lot of other jobs require,” Andrew said.

“This really is the breakthrough industry for South Africa because it creates jobs for individuals which will solve, to a large extent, our unemployment crisis.”

About 65% to 70% of call centre employees are under the age of 35, noted Nathalie Schooling, a customer experience specialist at industry company Nlightencx.

“There’s a pool of well-educated people who need jobs … The government knows this and that is why it is supporting this sector,”  she said.

The department of trade, industry and competition published a master plan in 2021 with the aim of growing the industry so it can help lower unemployment. The then trade minister Ebrahim Patel said at the time about 40 000 South Africans had been employed in call centres servicing the UK alone.

“There is an opportunity to scale current services up significantly, and to move up the value chain, by increasing the number of jobs that require more complex skills and problem-solving,” he said.

The government implemented a business process outsourcing and offshoring incentive programme in July 2007, which it says resulted in at least 6 000 new jobs and had attracted R303 million in direct investments by March 2010. 

Last year, the government allocated R569 million to the call centre industry, towards a target of creating 500 000 new jobs by 2030. 

Reaching this target would bring South Africa closer to outpacing the likes of India and the Philippines, the most and second-most favoured global call centre destinations, Andrew said. South Africa is third.

One factor that gives this country an advantage is having a similar culture to the UK and Australia, he said. 

Another is robust infrastructure which ensures there is limited latency — the lag in speech over the phone — or loss of quality during calls.

“We have good stability within the workforce, government support and educated youth. So, certainly from the UK and US perspective, if they were to outsource, we would be the flavour of the month. 

“Look at Amazon — why did they choose us?” Schooling asked.  

Amazon‘s customer service unit has been operating in South Africa since 2010 and, in 2020, the global retail giant said it would be hiring 3 000 people in the country to support customers in North America and Europe. This would bring the total permanent workforce in South Africa to 7 000. 

The initiative between Vodacom and Unisa has so far given employment to 18 people, who service the call centre 24 hours a day, working in shifts. 

“It gets difficult sometimes when you have the later shifts, in terms of transport to work and home, but I feel well trained for the job,” said new hire Nkosi.

She underwent six months of  training to be able to resolve queries from Unisa students and staff, ranging from billing to data provisioning and account disputes.

“The call centre aims at bridging the gap between the university and our students. Unisa students are scattered around the continent, and the only way to reach them is through this call centre initiative,” said Sibusiso Mthembu, director of supply-chain management at the long-distance university.

This is the lowest it has been since July 2021, when the rate was also 4.6%. 

Stats SA attributed the easing to lower annual rates for food and non-alcoholic beverages and transport, as well as housing and utilities. The annual inflation rate for food and non-alcoholic beverages dipped to 4.5% in July from 4.6% the previous month.

Food and non-alcoholic beverages inflation has trended down since its most recent high of 9% in November. It is at its lowest since September 2020, when it was 3.8%.

The price of fuel has a heavy bearing on inflation.

According to Stats SA, most categories in the transport group witnessed lower annual rates, including new and used vehicles, running costs and fuel. As a result, annual transport inflation softened to 4.2% in July from 5.5% in June.

Fuel prices receded for a second straight month, declining by 3.6% in July after a 4.6% decrease in June. The cost of 95-octane petrol in South Africa’s inland areas was 99 cents cheaper at R23.26 in July compared with June. The average price for diesel declined by 41 cents over the same period, from R23.76 to R23.35.

The Bureau for Economic Research had predicted CPI to slow to 4.9% year-on-year in July, and reach the 4.5% mid-point of the South African Reserve Bank’s (Sarb) 3-6% target band in September. 

Nedbank economists also expected an easing to 4.9% year-on-year in the July print. The bank said the downward pressure would come primarily from transport costs, reflecting lower petrol prices. Added to this, food and beverages inflation would start to edge up off a lower base. 

Lower inflation supports the case for the central bank to start lowering South Africa’s high interest rates next month. It hiked rates by a cumulative 475 basis points from late 2021 until May 2023, and has kept it unchanged at 8.25% since.

“We maintain our longstanding expectation that the Sarb will start to ease monetary policy from the next … meeting,” Standard Bank economist Shireen Darmalingam said. 
The reserve bank holds its monetary policy committee meetings once every two months, and its next interest rate announcement is on 19 September.