Democratic Republic of Congo President Joseph Kabila pledged on Wednesday to restore order to the country&#8217;s restive Kasai region, where a worsening insurgency poses the most serious threat to his 16-year rule.
Kabila&#8217;s failure to step down when his two-term mandate expired in December has further destabilised the loosely governed central African giant. Millions died in regional wars from 1996-2003 and dozens of armed groups still operate.
The Kamuina Nsapu insurrection erupted Kasai-Central province last August as a dispute over a customary chieftancy but has since spread to four other provinces, killing hundreds while taking on an increasingly political tone.
In a rare address to parliament, Kabila said he had designated Kasai an &#8220;operational sector&#8221; and called on militia members to lay down their arms.
<blockquote>&#8220;Confronted with these unacceptable atrocities committed against innocent victims &#8230; we can no longer defer our responsibility to re-establish state authority in this part of the country by all possible legal means,&#8221; Kabila said.</blockquote>
The United Nations has accused both government forces and militia fighters of rights abuses and said it has credible reports that the army has carried out summary executions against suspected militants.
The government denies that its forces employ excessive force but has charged seven soldiers with crimes including for murder and mutilation in connection with a video that appears to show troops massacring suspected militia members.
The U.N. mission in Congo warned in a statement on Wednesday that an intensified military response &#8220;will only exacerbate the violence and further place the civilian population in danger&#8221;.
The mission also said this week that it has confirmed the presence of 23 mass grave sites in the region.
Under a deal struck with the opposition in December, Kabila can stay in office until after an election required to be held by the end of this year.
However, negotiations to implement the accord collapsed last week amid a disagreement over the procedure for nominating a new prime minister from the main opposition bloc.
Kabila said in his speech that if the impasse persisted, he would go ahead and name a prime minister in the next 48 hours, a move fiercely opposed by opposition leadership.
(Reporting by Aaron Ross; Editing by Joe Bavier and Alison Williams)

Congo’s President Kabila promises to restore security to restive centre

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<a href="http://www.cnbc.com/karen-gilchrist/" rel="author">Karen Gilchrist</a> | <a href="http://twitter.com/_karengilchrist">@_karengilchrist</a>
The billionaire founder of <a class="inline_quotes" href="http://data.cnbc.com/quotes/EBAY" target="_self" data-gdsid="15829" data-inline-quote-symbol="EBAY">eBay</a> is to donate $100 million to support investigative journalism and counter the rise of &#8220;fake news&#8221;.
In his latest philanthropic venture, Pierre Omidyar has set his sights on fighting misinformation and hate speech which he says have led to a &#8220;global trust deficit&#8221; and increased division between governments and society.
The International Consortium of Investigative Journalists (ICIJ), the group behind the uncovering of the <a href="http://www.cnbc.com/2016/04/04/panama-papers-a-massive-document-leak-reveals-a-global-web-of-corruption-and-tax-avoidance.html" target="_self">Panama Papers</a> last year, will be among the independent and investigative media outlets to receive funding over the next three years.
<div id="inline_movable_ad"> The ICIJ will receive up to $4.5 million to expand its investigative reporting. Alianza Latinoamericana para la Tecnologia Civica (ALTEC), a project designed to promote civic engagement and transparency in Latin America, and The Anti-Defamation Legue (ADL), the world&#8217;s leading anti-Semitism organization, are among others so far announced to receive funding.</div>
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<div style="width: 540px" class="wp-caption alignnone"><img loading="lazy" decoding="async" src="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/04/05/104385553-GettyImages-129761761.530x298.jpg?v=1491389097" alt="Pierre Omidyar and Pamela Omidyar attend the Carnegie Medal of Philanthropy 10th Anniversary Award ceremony at The New York Public Library" width="530" height="298" />Steve Mack | WireImage</div>
<div class="attribution">Pierre Omidyar and Pamela Omidyar attend the Carnegie Medal of Philanthropy 10th Anniversary Award ceremony at The New York Public Library</div>
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The funds will be provided through the Omidyar Network, the philanthropic investment firm founded by Omidyar and his wife in 2004. It has so far committed more than $1 billion to good causes, including $220 million towards a Government &amp; Citizen Engagement initiative which aims to drive accountability and transparency within government.
&#8220;Across the world, we see a worrying resurgence of authoritarian politics that is undermining progress towards a more open and inclusive society,&#8221; stated Omidyar Network Managing Partner Matt Bannick.
&#8220;A lack of government responsiveness and a growing distrust in institutions, especially the media, are eroding trust. Increasingly, facts are being devalued, misinformation spread, accountability ignored, and channels that give citizens a voice withdrawn.
&#8220;These trends cannot become the norm, and we must protect the principles of openness, participation, and accountability. These are the foundations of a healthy democratic society.&#8221;
The recent emergence of corruption scandals within governments from Brazil to France and accusation and growing accusations against mainstream media outlets by governing bodies have led to growing mistrust within the public. The 2017 Edelman Trust Barometer suggests that citizens living within two thirds of the world&#8217;s major economies have trust levels of less than 50 percent in their country&#8217;s mainstream institutions.
&#8220;At a time when autocrats, demagogues, criminals, dodgy businessmen, and other shady characters are seeking to enrich and empower themselves at the expense of society, it is more important than ever that journalists can remain the world&#8217;s independent eyes and ears, and root out corruption and wrongdoing,&#8221; said Gerard Ryle, director of the ICIJ.
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EBay founder pledges $100 million to fight ‘fake news’

<a href="http://www.cnbc.com/lucy-handley/" rel="author">Lucy Handley</a>
An advert for <a class="inline_quotes" href="http://data.cnbc.com/quotes/PEP" target="_self" data-gdsid="28263" data-inline-quote-symbol="PEP">Pepsi</a> featuring model Kendall Jenner handing a can of soda to a police officer at a peace protest has sparked a backlash online.
In the ad, Jenner is seen posing in a blonde wig at a photo shoot, while a peace protest marches by. She then ditches the wig, grabs a can of Pepsi and joins the protest. Jenner gets to the front and hands the can to a police officer, who drinks as the crowd cheers.
The description below the ad on Pepsi&#8217;s Global YouTube channel states: &#8220;A short film about the moments when we decide to let go, choose to act, follow our passion and nothing holds us back.&#8221;
https://youtu.be/DSSCjj8uCFg
<blockquote class="twitter-tweet" data-lang="en">
The Kendall Jenner Pepsi fiasco is a perfect example of what happens when there&#8217;s no black people in the room when decisions are being made.
— Travon Free (@Travon) <a href="https://twitter.com/Travon/status/849409230754983936">April 4, 2017</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
People took to Twitter to comment, with comedian Travon Free saying: &#8220;The Kendall Jenner Pepsi fiasco is a perfect example of what happens when there&#8217;s no black people in the room when decisions are being made,&#8221; which has been retweeted more than 3,000 times.
https://twitter.com/Kelsiekinss/status/849382343508987905
Another tweeter wrote: &#8220;Can&#8217;t believe Kendall Jenner just solved institutionalized racism and oppression by giving a cop a Pepsi. Groundbreaking.&#8221;
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Could you be any more blatant with the disrespect and appropriation of a movement, <a href="https://twitter.com/pepsi?ref_src=twsrc%5Etfw">@pepsi</a>? Is this a sick joke?! <a href="https://t.co/8NS8ynJUdj">pic.twitter.com/8NS8ynJUdj</a>
&mdash; Taryn Finley (@_TARYNitUP) <a href="https://twitter.com/_TARYNitUP/status/849383788455100416?ref_src=twsrc%5Etfw">April 4, 2017</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
The ad has also been compared with the image of Ieshia Evans who was arrested by police at a protest in Baton Rouge, Louisiana, in 2016. Taryn Finley wrote: &#8220;Could you be any more blatant with the disrespect and appropriation of a movement, @Pepsi? Is this a sick joke?!&#8221;
A Pepsi spokesperson said in an emailed statement: &#8220;This is a global ad that reflects people from different walks of life coming together in a spirit of harmony, and we think that&#8217;s an important message to convey.&#8221;

Kendall Jenner’s Pepsi ad causes Twitter backlash, labeled disrespectful and a ‘sick joke’

Benin&#8217;s parliament narrowly rejected a draft bill by President Patrice Talon on Tuesday for a referendum to reform the constitution, including a provision to reduce presidential terms from the current two to one.
Talon came to power a year ago, promising to reduce the term limit because he said two terms were a cause of &#8220;complacency&#8221;.
Benin presidents can currently serve two five-year stints, and the bill wanted to shrink that to one six-year mandate.
Talon&#8217;s efforts to reduce term limits after a year in office contrasts with some other African leaders, including in Rwanda, Congo Republic and Burundi, who have scrapped them to stay in power.
His peaceful election last year was seen as reinforcing the democratic credentials of the tiny nation in a West African region where polls are often marred by violence, intimidation and rigging.
Lawmakers voted 60 to 22 in favour of the bill, with one abstention, but it needed 63 out of the total of 83 available votes to be passed and go to a referendum.
Those who voted against the changes said there should have been a public debate.
<blockquote>&#8220;The people don&#8217;t want this,&#8221; lawmaker Orou Kate told parliament. &#8220;The president needs to scrap this bill and go back to consult the population.&#8221;</blockquote>
(Writing by Tim Cocks; editing by John Stonestreet)

Benin parliament rejects bill aiming to reduce presidential terms

South Africa&#8217;s ruling African National Congress said on Tuesday it will brief media on Wednesday on decisions taken by senior officials after two days of meetings over a cabinet reshuffle by President Jacob Zuma.
The reshuffle has triggered divisions within the party.
S&amp;P Global Ratings cited the dismissal of respected former finance minister Pravin Gordhan as one reason for its downgrade of South Africa to &#8220;junk&#8221; in an unscheduled review on Monday, which sparked calls from several quarters for Zuma to quit.
(Reporting by James Macharia; editing by John Stonestreet)

South Africa’s ANC to give briefing on Wednesday after meetings on Zuma reshuffle

South Africa&#8217;s state-owned power utility Eskom on Wednesday said it had signed a new three-year deal to export electricity to Botswana.
Eskom, the sole power provider in South Africa, has struggled to meet power demand in the country in the past due to its ageing infrastructure. The utility now has excess capacity of 4,000 megawatts (MW) after new generation units were brought online and maintenance was carried out on power plants.
http://cnbc.africa/news/southern-africa/2017/03/13/zimbabwe-wants-continue-importing-power-south-africa/
<blockquote>&#8220;Eskom reaffirms its position that we are &#8216;open for business&#8217; and stand ready to undertake further long-term supply agreements,&#8221; Interim Eskom CEO Matshela Koko said.</blockquote>
South Africa signed a similar deal last month with its neighbour, Namibia.
http://cnbc.africa/news/southern-africa/2017/04/04/eskoms-medupi-power-station-unit-online-year-ahead-schedule/
(Reporting by by Joe Brock; Editing by Himani Sarkar)

South Africa’s Eskom signs power export deal with Botswana

This article was first published last year as South Africa faced a possible downgrade by rating agencies
Current developments in South Africa are reminiscent of events in 1985. In that year South Africa experienced high costs from currency depreciation and adverse political developments. At the time the country faced increasing international sanctions and isolation, while the exchange rate of the rand remained under severe pressure, recording sharp falls in the international value of the rand.
South Africa’s financial stability was put under severe pressure after the infamous <a href="https://www.nelsonmandela.org/omalley/index.php/site/q/03lv01538/04lv01600/05lv01638/06lv01639.htm">Rubicon speech</a> of then State President P W Botha. Before the speech, high expectations were raised internationally about the announcement of major political changes in South Africa, but these expectations did not materialise. Following the speech, foreign banks refused to roll over South African short-term foreign debt, causing further depreciation of the exchange rate of the rand.
In 2016 South Africa might see a slow motion repeat of the events of 1985, culminating in a debt standstill. The following events, reminiscent of developments then, could unfold:
<ul>
<li>a continued depreciation of the rand, accelerated by the President’s inexplicable decision to <a href="http://mg.co.za/article/2015-12-09-nhlanhla-nene-removed-as-finance-minister">remove</a> his Finance Minister. The depreciation substantially increases the capital value of and interest repayments on foreign debt; and</li>
<li>a downgrading of South Africa’s credit rating to junk status that results in credit lines being withdrawn by foreign funders such as banks.</li>
</ul>
This time we can see trouble ahead and the government should act responsibly to avert a slow motion replay of 1985.
<h2>Debt standstill</h2>
Currency depreciation brings certain benefits to a country. The most obvious is the fact that exports become cheaper abroad and that demand for exports are therefore stimulated.
Unfortunately currency depreciation does not only bring benefits. Imported goods and services also become more expensive. More expensive imports put pressure on domestic inflation that can result in increases in interest rates. In economics it has often been said:
<blockquote>There is no free lunch, everything has a cost, even if then only an opportunity cost.</blockquote>
Currency depreciation also increases the capital value of foreign debt in domestic currency (where foreign debt are designated in foreign curreny) and the interest burden on such debt, as interest is also paid in foreign currency.
In short: in 1985 an unwillingness of banks abroad to make loans to South African entities (albeit for political reasons) plus the depreciation of the currency resulted in the inability of the country to repay its foreign debt.
The financial crisis culminated in the “Debt Standstill”, a moratorium on the repayment of most of South Africa’s private sector foreign debt, but excluded government debt. Debt repayments were managed by a Debt Standstill Committee and rescheduled over an extended time period, with the last of the rescheduled debt repaid in 2001.
<h2>The falling rand</h2>
In recent months the exchange rate of the rand has shown considerable depreciation. This is actually an acceleration of a long-term declining trend. The nominal effective exchange rate of the rand has lost around 50% of its value <a href="https://www.resbank.co.za/Research/Rates/Pages/SelectedHistoricalExchangeAndInterestRates.aspx">since 2010</a>.
The South African Reserve Bank <a href="https://www.resbank.co.za/Research/Rates/Pages/SelectedHistoricalExchangeAndInterestRates.aspx">describes</a> the nominal effective exchange rate as
<blockquote>… a weighted exchange rate of the rand measured against a basket of the currencies of South Africa’s twenty most important trading partners. The calculation is based on trade in and consumption of manufactured goods.</blockquote>
On this basis, measured against 20 currencies, the rand has therefore lost about half of its value.
In assessing the “Debt Standstill” with the benefit of hindsight, it is important to distinguish between South Africa’s foreign debt and South African government debt, as only private sector foreign debt was caught in the standstill.
The country’s foreign debt is all funds borrowed abroad by South Africans, including companies, other entities and private individuals and includes the government’s foreign borrowing. By the middle of 2015 South Africa’s foreign debt amounted to some R1.7 trillion, of which 46% was denominated in <a href="https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/6999/10Statistical%20tables%20%E2%80%93%20International%20economic%20relations.pdf">foreign currency</a>.
South African government debt is the total of all funds borrowed by the government to balance its budget. South African government debt at present amounts to some <a href="http://www.treasury.gov.za/documents/mtbps/2015/mtbps/Technical%20annexure.pdf">R1.8 trillion</a>. Of this, some R190 billion (10%) is foreign debt, while the balance is borrowed from pension funds, banks and the like in South Africa.
South Africa’s foreign debt naturally includes the portion of the South African government <a href="http://www.treasury.gov.za/documents/mtbps/2015/mtbps/Technical%20annexure.pdf">debt borrowed abroad</a>, comprising about 11% of the country’s foreign debt. The balance is supplier credit, trade credit and the like. For instance: if a foreign supplier sells to a South African company and provides a six month credit line, the credit line is part of the country’s foreign debt for a period of six month.
This credit line has nothing to do with the South African government’s debt position, domestic or foreign. Government debt and the country’s foreign debt should not be confused.
Since 2007 South African foreign debt has shown a steady increase as percentage of both the gross domestic product (GDP) and total export earnings (TEE). At the same time interest payments on foreign debt as percentage of TEE have <a href="https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/6999/10Statistical%20tables%20%E2%80%93%20International%20economic%20relations.pdf">increased</a>.
<h2>Possible junk status</h2>
South Africa’s foreign debt position (which should not be confused with the debt of the South African government) is vulnerable in three respects. First, currency depreciation raises the capital value of the funds borrowed abroad in foreign currency, hence increasing the repayment burden on South African borrowers. Foreign debt as percentage of GDP increases owing to currency depreciation.
Secondly, interest payments on foreign debt increase owing to currency depreciation. This will be exacerbated by an international normalisation of interest rates. The result might be a raising TEE if the combined result of higher international rates and currency depreciation exceeds the increase in exports owing to currency depreciation.
These two factors were present in 1985, but were exacerbated at that time by political considerations, namely banks refusing to lend more money to South Africa after the Rubicon speech. The last element for a repeat of 1985 in slow motion might be triggered by another event some 30 years later: a credit risk downgrading to junk status of South Africa by international rating agencies.
If South Africa’s international risk rating is downgraded to junk status, international banks and other companies will be much more reluctant to make loans to South African entities, or will even withdraw existing credit lines.
This might be the seismic event similar to the withdrawal of international credit lines for political reasons in 1985, culminating in a debt standstill. The South African government should introduce in a timely fashion policies to avert a repetition on the events of 1985.

South Africa is on a cliff edge – just as it was in 1985

A lot has changed in the world in the past year.  Not all of it good, particularly the growing threat of protectionism.  But one thing, which has not changed is the urgent need for low carbon energy for the world to have any chance at all of averting dangerous climate change and keeping the rise in average temperature &lt; 2C.  The electricity generation industry has to eliminate carbon emissions almost completely by 2040.
One more thing that hasn&#8217;t changed is that the only reliable source of low carbon base load electricity is still nuclear power.   Let&#8217;s be clear &#8211; renewables make a very important contribution.  Nobody welcomes the fall in the cost of solar, wind and other renewable energy more than me and my organisation NNWE.  Renewable energy complements nuclear but it cannot replace nuclear as a supplier of baseload electricity.
One day perhaps a form of flexible long-term low-cost electricity storage may become available but there&#8217;s no sign of it yet and it would be recklessly irresponsible for any country to make energy policy on the basis that it will happen soon.
So we come back to nuclear as an essential part of the energy mix that applies just as much here in SA as it does in UK, EU, US, China, Korea, Russia and dozens of other countries around the world which plan to keep nuclear in that mix.
<h3>Need to cut carbon emissions</h3>
		
				
		
My support for nuclear energy in the last 25 years has been closely linked to my firm conviction about the need to cut carbon emissions in order to address climate change.  But in the last few years, the need to phase out fossil fuels has become urgent for another reason.  That&#8217;s to address health concerns about air quality.  In some places this is now the biggest and most urgent driver of energy policy.
Last week I was in China where this overriding concern about air pollution has recently led to the closure of every single coal-fired power station in and around Beijing.  Here in SA air pollution doesn&#8217;t pose quite such a desperately urgent threat to human health. But even here thousands of avoidable premature deaths are caused by poor air quality.  So until we have an economically viable form of carbon capture and storage there cannot be any long-term role for coal, as many investors around the world have already concluded.
China is switching away from coal as fast as it can and it can only do so because alongside the world&#8217;s largest renewable energy investment programme, it also has the world&#8217;s largest domestic nuclear programme but coal consumption isn&#8217;t the only source of air pollution.
Vehicle emissions from cars and trucks are a substantial additional cause in every country, and particularly in every city in the world.  Many people have recently been taken by surprise by the speed of the fall in the cost of solar power.  I urge SA not to be caught by surprise by the speed of the switch away from petrol or diesel powered vehicles to electric ones.  A switch, which the residents of every major city will soon be clamouring for, for the sake of the children and grandchildren.  Of the millions of prosperous and influential middle-class citizens who see the life expectancy of the next generation threatened by a reduction, if immediate action isn&#8217;t taken to clean up the air they breathe.
<h3>Slower growth in electricity consumption by 2030</h3>
This new trend will be led by the great cities in Asia but I&#8217;m certain that just up the road from here the citizens of Johannesburg will be hot on their heels.  This new trend, currently still in an embryonic state is directly relevant to another part of the debate here in SA.  Much interest has been sparked by the recent downward revision in the predicted demand for electricity but I seriously doubt that the forecasts of slower growth in electricity consumption in 2030 take sufficient, or even any, account of the possibility of a big extra demand for power as vehicles switch away from petrol/diesel to electricity.
Last year I identified cost as the only significant barrier to the rapid expansion of nuclear power because nuclear is already proven to be a reliable, clean and secure energy source with a safety record that is among the best in the whole energy sector.
But while fossil fuel prices remain low and the cost of renewables is still falling the need for nuclear to demonstrate that it is cost competitive is as strong as ever.  The good news is that cheaper nuclear energy is quickly becoming available.
Within the next 12 months, the first of four new Korean nuclear reactors will start producing electricity in UAE at a price, which will be cost competitive with other forms of electricity generation.
Or consider the case of Rosatom, which is building more latest generation reactors globally than any other vendor.  Rosatom appears to have managed to make it to the stage where the learning curve and the economies of scale enable it to enjoy falling costs too.
As for China&#8217;s Hualong One reactor which in the UK has just started to go through the rigorous GDA process required by the UK ONR in preparation for being built at Bradwell in the UK.  Given the size of China&#8217;s domestic market, I wouldn&#8217;t bet against that design also generating cost competitive electricity before the end of the 2020s.
<h3>Nuclear opponents site high upfront costs</h3>
I&#8217;m aware that some of the strongest opponents of nuclear argue that SA can&#8217;t afford the big upfront costs.  I don&#8217;t believe that they have recognised the extent of the fall in the price of nuclear, which the offerings from each of these vendors may well provide for the benefit of SA consumers.  What&#8217;s more these offerings aren&#8217;t necessarily limited to the technologies available.  The accompanying financial packages are also important.
The terms of any loan for nuclear new build projects have a big impact on the eventual cost of the electricity generated.  So the question isn&#8217;t &#8220;Can SA afford to invest in nuclear?&#8221;.  It&#8217;s &#8220;Can SA afford not to invest in nuclear?&#8221;
This imminent prospect of affordable new nuclear power means that the time for decisions about South Africa&#8217;s energy infrastructure is now.  This economy, blessed with great natural resources and a talented workforce has not fulfilled the high hopes, which accompanied the arrival of democracy in the last few years of the last century.  Capital investment has recently lagged all the countries in the region apart from Zimbabwe.   And not surprisingly in the last five years SA&#8217;s GDP growth has been around half of its neighbours.
The Government&#8217;s National Development Plan has rightly recognised that investment in infrastructure is necessary to support development and should be prioritised.  Investment in nuclear will therefore not only guarantee a supply of secure reliable low carbon electricity, it will also give the economy a much-needed shot in the arm.
But to capture these benefits this decision must be taken very soon.  SA can&#8217;t afford to wait until 2037 for its first new nuclear units come online.  Since I spoke at Nuclear Africa last year the future of nuclear here seems to have taken two steps forward and one back.
<h3>Integrated Resource Plan for Electricity</h3>
At a difficult economic time, the Integrated Resource Plan for Electricity published last November effectively set back the wider adoption of new nuclear.  So I hope the Government will now consider the representations from across the energy sector urging revision of the Plan to prioritise development of new nuclear.
The deadline for submission of the new nuclear build programme means certainty is needed to facilitate investment and progress.  According to the conclusions of the report which NNWE commissioned from Trusted Sources, the multiplier effect of investment in nuclear would be 3.4 x the monetary value added would amount to US $77 billion.  That&#8217;s close to a quarter of SA&#8217;s current GDP. 
By contrast, much of the economic benefit of additional investment in renewable energy goes to other countries, mostly in Asia from where the bulk of the components have to be imported.
The consequence of delaying new nuclear build until the late 2030s means slower economic growth, fewer high quality jobs and a less reliable power supply.  Furthermore investment in new nuclear offers SA the chance to develop a local supply chain network which in due course will have potential export markets across Africa and further afield.
Skills development in the STEM subjects will grow to meet the demand triggered by the investment in energy infrastructure.  The opportunity, which this creates for a new generation of black industrialists who can participate in and lead the building of the power plants and the supply of goods and services to the nuclear industry, is substantial and attractive.
There are potential supply chain participants attending this event. I urge them to join me in proclaiming to the business world, to the trade unions, to the politicians the public value of nuclear to SA. This isn&#8217;t just about the profits of a few companies.  It&#8217;s about jobs, about growth, about health.  These voices need to be heard.  And heard now
Energy investment decisions cannot be short term.  The impact of how SA decides in 2017 to meet its future energy needs will be felt right through to the second half of this century.  The energy problems which Germany now faces after its mistaken decision to shut down its nuclear fleet in the wake of Fukushima are a testament to the dangers of becoming too reliant on energy sources which are beyond a country&#8217;s control.
The key to making the right choices for SA are to recognise that thinking of SA&#8217;s energy needs, only in terms of today&#8217;s demand, or even the next five years demand, would be to rob the country of the future it deserves.
Nuclear energy will provide SA with a low carbon base load power source at a predetermined cost that will help transform the entire country.  With countries like Nigeria, Kenya and Ghana moving ahead with nuclear ambitions and leading nations like UK, the US, France, China and Canada continuing with their nuclear energy programmes, it&#8217;s time for SA to follow suit or risk being left in the dark.
Speech delivered to Nuclear Africa 2017 Conference, South Africa by Tim Yeo, Chair: New Nuclear Watch Europe (NNWE)

Can SA afford NOT to invest in nuclear energy?

Intellectual property theft, like a diamond, has many faces. It could be the turn of a phrase in poetry or the meticulous duplication of a catchy riff in a song; the thing that makes you think, “I’ve heard this somewhere before. It is the same but different.” 
A lot of the time it isn’t even that adroit. It is the product of someone’s talent, plagiarized completely by another with all the subtlety of a plane crash. And then there’s piracy, best practiced in the infamous stalls of Lagos’ Alaba market, bursting with CDs and DVDs that come from everywhere but the hands that made the content they hold. The creative’s profits delivered into the pocket of another aided by a computer with a disc drive. 
They are brave in the face of the law. As the rapper Vector tha Viper mused to CNBC Africa, “I’ve always wondered why the Nigerian government has not found a way to merge with them (Alaba Market). It’s the only way to truly measure the sales of what the industry produces.” It would not be far-fetched to say that if there is anything that stands in the way of Nigeria’s soon to be $8 billion entertainment industry according to PWC, it is the people who laugh in the face of the country’s inability to enforce its copyright laws. 
“The Nigerian Copyright Act is one of the best in the world.” Said Obafemi Agaba, a partner at Jackson, Etti, and Edun, a firm that’s thought to be one of the best in the country when it comes to intellectual property. An expert in his field, he isn’t wrong. The law has been amended twice since 1938, a detail that seems unremarkable until you consider that Nigeria’s Trademark law is exactly as it was nearly 80 years ago, a relic from 1938. And there’s a digital sized update on the way. Agaba was a member of the technical working group that drafted the new copyright bill. In an interview with CNBC Africa he said, “The important thing about the new bill is that it provides for what you call the technology era. The present law does not take care of things that happen in the digital space. The new bill has been able to address this.”
Some members of the Nigeria’s entertainment industry believe that the problem lies not with the law but with    people’s knowledge of it, and their faith in the legal system’s ability to defend it. Femi Oke, the Head of Commercial at the Temple Management Company said, “It’s down to the individual and individual awareness. It’s down to respecting individual creativity and not overstepping the bounds.” He later said, “People disregard these laws and feel that not much can be done if they take someone else’s work and only change a word or two.” However, this perception seems to be changing.
Last week, local newspapers were awash with reports about a film called Okafor’s Law. Its premiere screening was cancelled because of a pending claim in court that the movie’s script had been stolen from a Nigerian writer in Canada without compensation or accreditation. The claim was ultimately unsuccessful in blocking the film’s release but it signalled a previously unseen willingness from the affected to seek legal action in cases where they believed their rights infringed. As a result, the much-uttered phrase, see you in court, has gained more weight than it had before.
However, there is a degree of unwillingness from artists to deal with such incidents personally. The Afropop star, Patoranking, said, “All I want to do is go to the studio record, jump on stage, perform, talk to fans on social media, and take selfies with the girls. The fun part. So we need people to be in charge of the business part because you can’t do everything.” Obi Asika, the founder of Cabal entertainment agrees. He said, “A lot of artistes in Nigeria say they can do it on their own, and they use Jay Z as an example. But I say have you been to the Roc Nation building? There is 75 staff there, working in a serious 9-5 to get things done.”
For Obafemi Agaba, the informal nature of the industry is to blame. He said, “I’ve seen a lot of script writers come to me after they’ve got their fingers burnt and I have had to resolve the problem behind the scenes instead of the scriptwriter or creative player negotiating from a point of strength right from the beginning. So many are just operating on a friendly basis. They say, “Oh he’s my pal, let me just give him this story.” But things happen!”
To deal with the pirates of the entertainment industry, Nigerian creatives have all but turned their backs on making physical copies of their work. Yoruba pop music sensation, Olamide said, “Right now. It’s online.” Phyno, who hails from Nigeria’s east provided more detail. When speaking about selling physical records he said, “It isn’t what it’s supposed to be. Mediums like iTunes, Spotify, tidal, and amazon, pay.” He too blamed the culture saying, “It’s an educational process. We need to make people understand that music is not free.” Dare Olaitan, the writer and director of the critically acclaimed new film, Ojukokoro, has no plans to release his movie on DVD when it leaves the cinema. He said, “The plan is to follow the other avenues of distribution. Video on Demand (VOD), airlines, paid television, and then terrestrial tv. In that order. I have no plans to release DVDs.” When I asked him why not, he was curt. “The others are forms of release in which we can have security in getting returns on our investment.” 
As bleak as the situation seems, there is some light at the end of the tunnel. The Copyright Society of Nigeria was set up at the turn of the new millennium to promote and protect the copyright of players in Nigeria’s music industry. The body has tackled intellectual property theft with a sea of lawyers and a storm of litigation, slapping telecommunications giants MTN and Etisalat with lawsuits worth N16 billion and N12 billion respectively. Their crusade is one Vector is glad for. He said, ‘I have to shout out to COSON because I’ve gotten royalty checks and they were quite impressive. At one point I thought, “you want to give me a check for Royalties, um, why?’ Because it’s never happened before.’
Obi Asika has called for artistes to join the copyright crusade. He said, “We need to get the artistes now, when they are young and hot, to promote the importance of copyright, because when they’re older and they don’t have any hit records, it may be the residual income from publishing or royalties that’s keeping them going.” 
Players in the industry look to Nigeria’s government for help. In the words of the President of the Association of Nollywood core producers, Alex Enyeho, “What we expect from the government is to create an enabling environment for us to practice our trade.”

How piracy threatens Nigeria’s entertainment industry

In the United States, adults who have a college degree make more money and face lower unemployment rates than those who don&#8217;t, according to federal government Labor Department data. But there are exceptions to every rule.
Steve Jobs, Bill Gates, Mark Zuckerberg, Richard Branson and John Paul DeJoria are all self-made billionaire entrepreneurs who either dropped out of college or skipped higher ed entirely.
The legendary Apple CEO attended Reed College in Portland, Ore., for one semester before dropping out because he didn&#8217;t have any money, he says in a graduation speech he delivered in 1991. He enrolled for another year and a half of coursework later on, he says.
Zuckerberg and Gates both dropped out of Harvard when their respective tech companies, Facebook and Microsoft, started taking off.
<blockquote>&#8220;YOUR ABILITY TO THINK DIFFERENTLY WILL BECOME ONE OF YOUR BIGGEST ADVANTAGES IN LIFE – TAKING YOU PLACES WHERE MOST STRAIGHT-A STUDENTS WILL NEVER GO.&#8221; 
-Richard Branson, founder Virgin Group</blockquote>
Branson and DeJoria skipped college entirely. Branson dropped out of high school to start his first ever venture, Student magazine. He went on to found Virgin Brands, which now includes some 60 companies with 60 million customers around the world.
<iframe loading="lazy" src="http://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&amp;byGuid=3000602853" border="0" frameborder="0" width="630" height="360" allowfullscreen="allowfullscreen"></iframe>
DeJoria went directly into the U.S. Navy after high school. When he returned from active duty, he had a hard time finding a job. At one point, he collected bottles for cash. He went on to co-found the hair care company Paul Mitchell Systems and tequila maker Patrón Spirits Co.
Their stories are evidence that there is no single track to success. Even if you don&#8217;t thrive in academic settings, there are many diverse paths available to you for reaching your goals.
As Branson says in a letter to his 10-year-old self, his lack of success in the classroom opened other doors for him later in life.
&#8220;Your imagination is one of your greatest gifts – this will become more and more apparent when you enter secondary school,&#8221; <a class="inline_asset" href="https://www.virgin.com/node/108216" target="_self">writes Branson to himself</a>. &#8220;You will face many challenges, and often feel like you don&#8217;t fit in and that you can&#8217;t always keep up. Don&#8217;t let this hold you back.
&#8220;Use your imagination to find inventive ways around it. Your ability to think differently will become one of your biggest advantages in life – taking you places where most straight-A students will never go.&#8221;

These 5 self-made billionaires all share the same surprising trait

S&amp;P delivers a pre-emptive strike on SA&#8217;s credit ratings, downgrading hard currency rating to sub-investment grade and local currency to the last notch of investment grade.
<ul>
<li>Last night Standard &amp; Poor&#8217;s (S&amp;P) acted on the negative outlook it had previously placed on SA&#8217;s sovereign debt, dropping SA’s long-term foreign currency credit rating to BB+ (from BBB-), and the long-term local currency rating to BBB- (from BBB).</li>
</ul>
<ul>
<li>In addition, with a negative outlook placed on both ratings, S&amp;P signalled further downgrades were far from over, stating &#8220;political risks will remain elevated this year, and … policy shifts are likely, which could undermine fiscal and economic growth outcomes more than we currently project.”</li>
</ul>
<ul>
<li>Having lost its S&amp;P headline country investment grade rating, SA is now at greatly increased risk of losing its S&amp;P local currency investment grade rating (as it is now BBB- with a negative outlook), and so at risk of a much more difficult path of fiscal consolidation.</li>
</ul>
<ul>
<li>While rand-denominated issuance is around 90% and hard currency 10%, the downgrades will raise borrowing costs, undermine investor confidence, likely reduce the attractiveness of SA bonds at auction, and so negatively impact SA&#8217;s ease of funding. This, in turn, will have a negative impact on SA’s government finances.</li>
</ul>
<ul>
<li>S&amp;P added “The downgrade reflects our view that the divisions in the ANC-led government that have led to changes in the executive leadership, including the finance minister, have put policy continuity at risk. This has increased the likelihood that economic growth and fiscal outcomes could suffer. “</li>
</ul>
<ul>
<li>Higher borrowing costs increase the cost of repaying government debt, and without a substantial, and sustainable curtailment in government expenditure and rise in revenue,  increase the chance of further credit downgrades. Upwards pressure is placed on interest rates (weaker economic growth) and rand weakness (as investors lose confidence and sell SA portfolio assets) which exacerbates the situation, reducing further government&#8217;s capacity for expenditure, including existing social welfare grants.</li>
</ul>
<ul>
<li>S&amp;P identifies that “Internal government and party divisions could, we believe, delay fiscal and structural reforms, and potentially erode the trust that had been established between business leaders and labor representatives (including in the critical mining sector). … We think that ongoing tensions and the potential for further event risk could weigh on investor confidence and exchange rates, and potentially drive increases in real interest rates.”</li>
</ul>
<ul>
<li>SA&#8217;s net debt has risen from 22% of GDP in 2008/09 to 46.0% of GDP in 2016/17, and is scheduled to rise to 48% of GDP in 2019/20. If government ignores the trend and fails to reign in mounting debt and return it closer to 40% of GDP then the rating agencies perceived creditworthiness of SA debt (SA&#8217;s sovereign credit ratings) will likely fall further. It will likely take several years for South Africa to regain its investment grade country rating from S&amp;P.</li>
</ul>
<ul>
<li>Borrowing to pay current expenditure (including debt service costs) risks a debt trap developing,  and such a downward spiral risks ultimate debt default, whether it’s an individual or sovereign.  Such sovereign bankruptcy risk (failed state) is exacerbated by credit rating downgrades clearly,  as credit rating downgrades increase the cost of servicing debt.</li>
</ul>
<ul>
<li>S&amp;P has also warned that “(t)he rating action also reflects our view that contingent liabilities to the state, particularly in the energy sector, are on the rise, and that previous plans to improve the underlying financial position of Eskom may not be implemented in a comprehensive and timely manner. In our view, higher risks of budgetary slippage will also put upward pressure on South Africa&#8217;s cost of capital, further dampening already-modest growth.”</li>
</ul>
<ul>
<li>S&amp;P’s downgrades have occurred outside the scheduled country review calendar. However, such has been the perceived severity of the recent political events that the agency has acted now between reviews on “the heightened political and institutional uncertainties that have arisen from the recent changes in executive leadership”. Moody’s has signalled it could also move sooner on a downgrade than its planned 7th April. Fitch tends to be aligned with S&amp;P, and so could also provide a sub investment country credit rating for South Africa this year.</li>
</ul>

S&P signals further credit ratings downgrades for S.A are far from over

South Africa&#8217;s rand, bonds and banking shares tumbled sharply on Tuesday after S&amp;P Global Ratings cut the country&#8217;s credit rating to junk in response to President Jacob Zuma&#8217;s move to sack its respected finance minister.
Zuma&#8217;s cabinet reshuffle has triggered public criticism from within the ruling African National Congress (ANC) and pressure is likely to mount on the president after the credit agency handed South Africa its first downgrade since 2000.
http://cnbc.africa/news/southern-africa/2017/04/03/rating-downgrade-risks-triggering-series-economic-setbacks-south-africa-irr/
New Finance Minister Malusi Gigaba is due to hold a news conference later in the day.
Gigaba said on Monday he would pursue &#8220;tough and unpopular choices&#8221; to oversee a redistribution of wealth to the black majority, a stance echoing recent comments by Zuma. No details of the changes have been made public yet.
The one-notch downgrade to BB+, S&amp;P&#8217;s highest non-investment grade, will almost certainly force Africa&#8217;s most advanced economy to pay more to borrow its from international markets and possibly and may fall off global investors&#8217; radar screens.
&#8220;This sovereign downgrade will lead to a steep erosion of already poor levels of investor confidence,&#8221; Cas Coovadia, head of the banking industry lobby group said.
&#8220;Negative investor confidence will directly undermine an economy already struggling to achieve the levels of growth needed to meaningfully create jobs or lift our population out of poverty.&#8221;
http://cnbc.africa/trending/cabinet-reshuffle-17/2017/04/03/stand-rand-say-south-africas-currency-will-weather-storm/
Moody&#8217;s also said late on Monday that it was placing South Africa on review for downgrade, and that it would assess the likelihood of changes in key areas of financial and macro-economic policymaking following Zuma&#8217;s cabinet changes.
The rand weakened as much as 1.9 percent before recovering to trade 1.2 percent lower at 13.8400 per dollar.
The Johannesburg Securities Exchange&#8217;s banking index slumped as much as 4.2 percent, while the yield for the benchmark government bond due in 2026 rose 16 basis points to 9.140 percent.
(Reporting by Joe Brock and Tiisetso Motsoeneng; Editing by James Macharia)

South African rand, bonds & banking shares fall sharply after downgrade

<a href="http://www.cnbc.com/matt-clinch/" rel="author">Matt Clinch</a> | <a href="http://twitter.com/mattclinch81">@mattclinch81</a> 
Streaming Music
The late, great David Bowie got it spot on back in 2002. Telling the <a class="inline_asset" href="http://www.nytimes.com/2002/06/09/arts/david-bowie-21st-century-entrepreneur.html" target="_self">New York Times</a> that music is going to become like &#8220;running water or electricity,&#8221; the &#8220;Starman&#8221; singer predicted the meteoric rise of the streaming subscription that last week confirmed its place in the upper echelons of the industry.
The fragile U.S. music industry saw retail revenues from recorded music grow 11.4 percent in 2016 to $7.7 billion, according to the Recording Industry Association of America (RIAA). This was thanks, in no small part, to a doubling of paid streaming music subscriptions which helped the American music business experience its biggest gain since 1998.
&#8220;For the first time ever, streaming music platforms generated the majority of the U.S. music industry&#8217;s revenues &#8230; Streaming grew from just 9 percent of the market in 2011 to 51 percent of total industry revenues in 2016.&#8221; The RIAA confirmed, namechecking such services as Spotify, TIDAL and <a class="inline_quotes" href="http://data.cnbc.com/quotes/AAPL" target="_self" data-gdsid="8016" data-inline-quote-symbol="AAPL">Apple</a> Music.
It&#8217;s an impressive rise but the new technology has yet to truly capture any of my cash. I&#8217;ve dabbled in the &#8220;freemium&#8221; models for some services and I&#8217;ve purchased a few weeks&#8217; worth of access to one particular streaming subscription. But that&#8217;s it. I&#8217;ve so far resisted, clinging on desperately to my vinyl collection and any CDs I still have from the 1990s that aren&#8217;t scratched beyond playability. That is, until now.
With the upcoming launch of <a class="inline_quotes" href="http://data.cnbc.com/quotes/GOOGL" target="_self" data-gdsid="19004" data-inline-quote-symbol="GOOGL">Google</a> Home in the U.K. and the advertising onslaught that <a class="inline_quotes" href="http://data.cnbc.com/quotes/AMZN" target="_self" data-gdsid="9399" data-inline-quote-symbol="AMZN">Amazon</a> is currently undertaking with its own smart assistant Alexa, it won&#8217;t be long before there&#8217;s a talking robot nestled between the books on my dining room shelf.
And there lies the major selling point for me. Call me lazy, but who wouldn&#8217;t want to shout &#8220;play Roy Orbison&#8217;s &#8216;Crying'&#8221; at a voice-controlled speaker when you&#8217;re about to embark on the chopping of an onion?
http://cnbc.africa/news/technology/2017/01/04/amazon-is-selling-tvs-that-you-can-talk-to/
The British Phonographic Industry is already notably excited at the prospect, highlighting in a report that these assistants &#8220;are likely to evolve into our de facto musical concierges around the home and in the car.&#8221;
And it&#8217;s the list of smart commands that&#8217;s a real deal breaker. Amazon&#8217;s official list of voice commands for Alexa include some very vague human interactions that are likely to get some very interesting results. Think of how much fun you could have after demanding it to &#8220;play the top rock songs from 1988?&#8221;. Or maybe even: &#8220;Play that song with the lyrics &#8220;De do do do de da da da, is all I want to say to you.&#8221;
It&#8217;ll be a party gimmick, the excitement will wear off after a few weeks &#8211; but ultimately it&#8217;s an enabler and will help me listen to even more music. Mr. Bowie would have approved.

Streaming has now taken over the music industry and A.I. will push it into the stratosphere

Nigerian oil tanker drivers ended a strike over pay and the poor condition of the roads just hours after it began on Monday, following a government intervention, ending the threat of fuel shortages developing.
The union called off the strike &#8220;because the federal government has intervened and promised to look into the drivers&#8217; demands,&#8221; said Charles Eleto, a regional chairman for Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), one of Nigeria&#8217;s two major oil workers&#8217; unions.
In a meeting in the capital Abuja on Monday, the head of the Nigerian National Petroleum Corporation agreed with NUPENG&#8217;s president to increase transportation fees for the workers, said a spokesman for the firm.
(Reporting by Camillus Eboh and Anamesere Igboeroteonwu; Additional reporting by Alexis Akwagyiram in Lagos; Writing by Paul Carsten; Editing by Greg Mahlich)

Nigeria oil tanker drivers call off strike after government pay deal

Unit five of the Medupi power station in South Africa&#8217;s northern Limpopo province began commercial operations on Monday, adding 800 megawatts (MW) to the national grid, after it was completed one year ahead of schedule.
South African power utility Eskom, which has in the past been forced to impose power cuts due to insufficient supply, is scrambling to revamp its ageing plants. The unit was expected to become commercially operational by March 2018.
Other Eskom projects include the Ingula hydro-powered plant in the northeast of KwaZulu-Natal, and the Kusile coal-fired plant in eastern Mpumalanga province, which have a combined capacity of about 6,132 MW.
RELATED:
http://cnbc.africa/news/2016/12/28/south-africa-boosts-power-capacity-as-new-unit-linked-to-grid/
(Reporting by Olwethu Boso; Editing by Mark Potter)

Eskom’s Medupi power station unit online a year ahead of schedule

The IRR says the decision this evening by S&amp;P Global Ratings to cut South Africa’s long term foreign currency sovereign credit rating to speculative grade or ‘junk status’ risks triggering a series of economic setbacks that will affect the living standards of all South Africans directly.
The Head of the IRR’s Centre for Risk Analysis, Mr Kerwin Lebone, said, “the announcement is a considerable setback particularly after the effort that was made by business, civil society, and some government leaders to prevent precisely this outcome”.
IRR CEO Dr Frans Cronje said, “the downgrade greatly complicates the prospects for South Africa being able to stage an economic recovery. Without a growth recovery, employment growth and revenue collection will stagnate and may even decline. The result will be a series of year on year declines in the living standards of poor and middle class South Africans alike. With growth rates having slipped to just 0.3% of GDP in 2016 the prospects for recession will now again appear on investor radars. A priority for policy makers must therefore be to take urgent steps to ensure that South Africa does not now move through a destructive cycle of multiple downgrades. This will require that last week’s decision to appoint Malusi Gigaba as finance minister be reviewed and reversed. While we had been prepared to adopt a wait and see attitude to the new minister, his comments since being appointed, particularly those criticising what he called ‘orthodox economics’, were reckless in the extreme and suggest that he will not be able to navigate the South African economy through a very sensitive era”.
<a href="http://cnbc.africa/featured/2017/04/03/south-africa-long-term-foreign-currency-rating-cut-bb-political-institutional-uncertainty-outlook-negative/">In a note S&amp;P suggested the rating cut had been triggered by the cabinet reshuffle last week.</a>
However Cronje said, “while the downgrade may have been triggered by the reshuffle and the finance minister’s subsequent remarks, the deeper reason for the downgrade is the counter-productive nature of cabinet policy making since 2008. Wastage and corruption together with the bailing out of a series of unproductive state owned companies have squandered very precious tax resources that should have gone into infrastructure development and service delivery.  The cabinet has time and again moved to undermine local and domestic investment confidence in the economy by threatening property rights and investor protections. It has also raised the costs of doing business, and thereby lowered South Africa’s relative economic competitiveness, through its policies on labour and empowerment. Many of these policies were championed by ministers and politicians who are now critical of President Zuma. The point is that South Africa’s economic troubles extend much deeper than Mr Zuma and his remaining political allies. It will take fundamental reforms in all major areas of policy to restore South Africa’s investment grade rating”.
Cronje added, “in all respects the ante has been upped considerably. If the government responds by reversing the reshuffle and introducing reforms then much progress may be made. If it refuses or vacillates about what to do then economic conditions may worsen considerably. If it hunkers down and draws the laager tight around itself while exacerbating the worst aspects of current policy then South Africa may find itself entering a long term recession”.

Rating downgrade risks triggering a series of economic setbacks for South Africa – IRR

<h3>South Africa Long-Term Foreign Currency Rating Cut To BB+</h3>
Statement by S&amp;P:
OVERVIEW
<ul>
<li>In our opinion, the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes.</li>
<li>We assess that contingent liabilities to the state are rising.</li>
<li>We are therefore lowering our long-term foreign currency sovereign credit rating on the Republic of South Africa to &#8216;BB+&#8217; from &#8216;BBB-&#8216; and the long-term local currency rating to &#8216;BBB-&#8216; from &#8216;BBB&#8217;.</li>
<li>The negative outlook reflects our view that political risks will remain elevated this year, and that policy shifts are likely, which could undermine fiscal and economic growth outcomes more than we currently project.</li>
</ul>
<div id="attachment_116852" style="width: 1884px" class="wp-caption aligncenter"><a href="http://cnbc.africa/wp-content/uploads/2017/04/ZARUSD20170403.18.44.png"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-116852" class="wp-image-116852 size-full" src="http://cnbc.africa/wp-content/uploads/2017/04/ZARUSD20170403.18.44.png" alt="Rand falls to 13.68 after S&amp;P issues advisory on downgrade | Reuters Eikon | 18:45" width="1874" height="778" /></a>Rand falls to 13.68 after S&amp;P issues advisory on downgrade | Reuters Eikon | 18:45</div>
RATING ACTION
On April 3, 2017, S&amp;P Global Ratings lowered the long-term foreign currency sovereign credit rating on the Republic of South Africa to &#8216;BB+&#8217; from &#8216;BBB-&#8216; and the long-term local currency rating to &#8216;BBB-&#8216; from &#8216;BBB&#8217;.
We also lowered the short-term foreign currency rating to &#8216;B&#8217; from &#8216;A-3&#8217; and the short-term local currency rating to &#8216;A-3&#8217; from &#8216;A-2&#8217;. The outlook on all the long-term ratings is negative.
In addition, we lowered the long-term South Africa national scale rating to &#8216;zaAA-&#8216; from &#8216;zaAAA&#8217;. We affirmed the short-term national scale rating at &#8216;zaA-1&#8217;.
As a &#8220;sovereign rating&#8221; (as defined in EU CRA Regulation 1060/2009 &#8220;EU CRA Regulation&#8221;), the ratings on the Republic of South Africa are subject to certain publication restrictions set out in Art 8a of the EU CRA Regulation, including publication in accordance with a pre-established calendar (see &#8220;Calendar Of 2017 EMEA Sovereign, Regional, And Local Government Rating 
Publication Dates ,&#8221; published Dec. 16, 2016, on RatingsDirect). Under the EU CRA Regulation, deviations from the announced calendar are allowed only in limited 
circumstances and must be accompanied by a detailed explanation of the reasons for the deviation.
In this case, the reasons for the deviation are the heightened political and institutional uncertainties that have arisen from the recent changes in executive leadership. The next scheduled rating publication on the sovereign rating on the Republic of South Africa will be on June 2, 2017.
		
				
		
RATIONALE
The downgrade reflects our view that the divisions in the ANC-led government that have led to changes in the executive leadership, including the finance minister, have put policy continuity at risk. This has increased the likelihood that economic growth and fiscal outcomes could suffer. The rating action also reflects our view that contingent liabilities to the state, particularly in the energy sector, are on the rise, and that previous plans to improve the underlying financial position of Eskom may not be implemented in a comprehensive and timely manner. In our view, higher risks of budgetary slippage will also put upward pressure on South Africa&#8217;s cost of capital, further dampening already-modest growth.
Internal government and party divisions could, we believe, delay fiscal and structural reforms, and potentially erode the trust that had been established between business leaders and labor representatives (including in the critical mining sector). An additional risk is that businesses may now choose to withhold investment decisions that would otherwise have supported economic 
growth. We think that ongoing tensions and the potential for further event risk could weigh on investor confidence and exchange rates, and potentially drive increases in real interest rates.
We have also reassessed South Africa&#8217;s contingent liabilities. This reflects the increased risk that nonfinancial public enterprises will need further extraordinary government support. We expect guarantee utilizations will reach South African rand (ZAR) 500 billion in 2020, or 10% of 2017 GDP. The utilizations are dominated mainly by Eskom (BB-/Negative/&#8211;), which benefits 
from a government guarantee framework of ZAR350 billion (US$25 billion)&#8211;about 7% of 2017 GDP. We estimate Eskom will have used up to ZAR300 billion of this framework by 2020.
South Africa&#8217;s energy regulator has capped Eskom&#8217;s permitted 2017/2018 tariff increase at 2.2%&#8211;with negative implications for its financial performance. Eskom will fund the resulting revenue gap via borrowings of up to ZAR70 billion, of which up to half may utilize government guarantees. Other state-owned entities that we think still pose a risk to the country&#8217;s fiscal outlook include national road agency Sanral (not rated), which is reported to have revenue collection challenges with its Gauteng tolling system, and South African Airways (not rated), which may be unable to obtain financing without additional government support. While governance reforms have proceeded at the airline, Eskom still has to complete its board appointments and appoint a permanent CEO. Broader reforms to state-owned enterprises are still being discussed and we do not foresee implementation in the near term.
South Africa continues to depend on resident and nonresident purchases of rand-denominated local currency debt to finance its fiscal and external deficits. We estimate that the change in general government debt will average 4.2% of GDP over 2017-2020. On a stock basis, general government debt net of liquid assets increased to about 48% of GDP in 2017 from about 30% in 2010, 
and we expect it will stabilize at just below 50% of GDP in the next three years. Although less than one-tenth of the government&#8217;s debt stock is denominated in foreign currency, nonresidents hold about 35% of the government&#8217;s rand-denominated debt, which could make financing costs vulnerable to foreign investor sentiment, exchange rate fluctuations, and rises in developed market interest rates. We project interest expense will remain at about 11% of government revenues this year.
South Africa&#8217;s pace of economic growth remains a ratings weakness. It continues to be negative on a per capita GDP basis. While the government has identified important reforms and supply bottlenecks in South Africa&#8217;s highly concentrated economy, delivery has been piecemeal in our opinion. The country&#8217;s longstanding skills shortage and adverse terms of trade also explain 
poor growth outcomes, as does the corporate sector&#8217;s current preference to delay private investment, despite high margins and large cash positions.
South Africa&#8217;s gross external financing needs are large, averaging over 100% of current account receipts (CARs) plus usable reserves. However, they are declining because the current account deficit is narrowing. The trade deficit (surplus in 2016) has seen contraction, but given the small recovery in oil prices (oil constitutes about one-fifth of South Africa&#8217;s imports) we could 
see the trade balance weakening again. We could also see weaker domestic demand and a notable increase in exports from the mining and manufacturing sectors, along with a slower pace of increase in imports.
http://cnbc.africa/news/southern-africa/2017/03/27/rand-weakens-cabinet-reshuffle-reports-finmin-recalled-overseas-trip/
We believe sustained real exports growth is likely to be slow over 2017-2020 because of persistent supply-side constraints to production. Import growth will be compressed amid currency weakness and the subdued domestic economy. Therefore, we estimate current account deficits will average close to 4% of GDP over 2017-2020. However, South Africa funds part of its current account deficits with portfolio and other investment flows, which could be volatile. This volatility could stem from global changes in risk appetite; foreign investors reappraising prospective returns in the event of growth or policy slippage in South Africa; or rising interest rates in developed markets.
We consider South Africa&#8217;s monetary policy flexibility, and its track record in achieving price stability, to be important credit strengths. South Africa continues to pursue a floating exchange rate regime. The South African Reserve Bank (SARB; the central bank) does not have exchange rate targets and does not defend any particular exchange rate level. We assess the SARB as being 
operationally independent, with transparent and credible policies. The repurchase rate is the bank&#8217;s most important monetary policy instrument. Absent large currency depreciations, we expect that inflation will fall back below 6% this year and remain in the target range of 3%-6% over our three-year forecast horizon.
OUTLOOK
The negative outlook reflects our view that political risks will remain elevated this year, and that policy shifts are likely which could undermine fiscal and growth outcomes more than we currently project. If fiscal and macroeconomic performance deteriorates substantially from our baseline forecasts, we could consider lowering the ratings. We could revise the outlook to stable if we see political risks reduce and economic growth and/or fiscal outcomes strengthen compared to our baseline projections.
KEY STATISTICS
<table>
<tbody>
<tr>
<td>Table 1: Republic of South Africa Selected Indicators</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td></td>
<td>2011</td>
<td>2012</td>
<td>2013</td>
<td>2014</td>
<td>2015</td>
<td>2016</td>
<td>2017</td>
<td>2018</td>
<td>2019</td>
<td>2020</td>
</tr>
<tr>
<td>ECONOMIC INDICATORS (%)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td>Nominal GDP (bil. LC)</td>
<td>3,024</td>
<td>3,254</td>
<td>3,540</td>
<td>3,808</td>
<td>4,050</td>
<td>4,337</td>
<td>4,640</td>
<td>5,001</td>
<td>5,400</td>
<td>5,834</td>
</tr>
<tr>
<td>Nominal GDP (bil. $)</td>
<td>416</td>
<td>396</td>
<td>367</td>
<td>351</td>
<td>317</td>
<td>295</td>
<td>344</td>
<td>351</td>
<td>359</td>
<td>369</td>
</tr>
<tr>
<td>GDP per capita (000s $)</td>
<td>8.1</td>
<td>7.6</td>
<td>6.9</td>
<td>6.5</td>
<td>5.8</td>
<td>5.3</td>
<td>6.1</td>
<td>6.1</td>
<td>6.1</td>
<td>6.2</td>
</tr>
<tr>
<td>Real GDP growth</td>
<td>3.3</td>
<td>2.2</td>
<td>2.5</td>
<td>1.7</td>
<td>1.3</td>
<td>0.3</td>
<td>1.4</td>
<td>1.8</td>
<td>2</td>
<td>2</td>
</tr>
<tr>
<td>Real GDP per capita growth</td>
<td>1.7</td>
<td>0.6</td>
<td>0.9</td>
<td>0.1</td>
<td>-0.4</td>
<td>-1.4</td>
<td>-0.2</td>
<td>0.2</td>
<td>0.4</td>
<td>0.4</td>
</tr>
<tr>
<td>Real investment growth</td>
<td>5.5</td>
<td>2.6</td>
<td>7.2</td>
<td>1.7</td>
<td>2.3</td>
<td>-3.9</td>
<td>1.3</td>
<td>2</td>
<td>2.5</td>
<td>2.5</td>
</tr>
<tr>
<td>Investment/GDP</td>
<td>19.8</td>
<td>20.2</td>
<td>21.2</td>
<td>21.1</td>
<td>21.1</td>
<td>19.9</td>
<td>20</td>
<td>20.4</td>
<td>20</td>
<td>19.6</td>
</tr>
<tr>
<td>Savings/GDP</td>
<td>17.5</td>
<td>15.1</td>
<td>15.4</td>
<td>15.8</td>
<td>16.7</td>
<td>16.7</td>
<td>16.3</td>
<td>16.5</td>
<td>16</td>
<td>15.5</td>
</tr>
<tr>
<td>Exports/GDP</td>
<td>30.5</td>
<td>29.7</td>
<td>30.9</td>
<td>31.2</td>
<td>30.4</td>
<td>30.3</td>
<td>30.3</td>
<td>30.6</td>
<td>31.2</td>
<td>32</td>
</tr>
<tr>
<td>Real exports growth</td>
<td>3.5</td>
<td>0.8</td>
<td>3.6</td>
<td>3.2</td>
<td>3.9</td>
<td>-0.1</td>
<td>2.7</td>
<td>3.3</td>
<td>3.8</td>
<td>4.5</td>
</tr>
<tr>
<td>Unemployment rate</td>
<td>24.7</td>
<td>24.9</td>
<td>24.7</td>
<td>25.1</td>
<td>25.4</td>
<td>26.7</td>
<td>26.5</td>
<td>26.3</td>
<td>26.3</td>
<td>26</td>
</tr>
<tr>
<td>EXTERNAL INDICATORS (%)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td>Current account balance/GDP</td>
<td>-2.2</td>
<td>-5.1</td>
<td>-5.9</td>
<td>-5.3</td>
<td>-4.4</td>
<td>-3.3</td>
<td>-3.7</td>
<td>-3.9</td>
<td>-4</td>
<td>-4</td>
</tr>
<tr>
<td>Current account balance/CARs</td>
<td>-7</td>
<td>-16.4</td>
<td>-18</td>
<td>-15.9</td>
<td>-13.4</td>
<td>-10.1</td>
<td>-11.5</td>
<td>-12</td>
<td>-12.2</td>
<td>-11.8</td>
</tr>
<tr>
<td>CARs/GDP</td>
<td>31.7</td>
<td>31.2</td>
<td>32.7</td>
<td>33.4</td>
<td>32.8</td>
<td>32.3</td>
<td>32.2</td>
<td>32.6</td>
<td>33.2</td>
<td>34</td>
</tr>
<tr>
<td>Trade balance/GDP</td>
<td>1.6</td>
<td>-1.1</td>
<td>-2.1</td>
<td>-1.7</td>
<td>-0.9</td>
<td>0.3</td>
<td>0</td>
<td>-0.3</td>
<td>-0.4</td>
<td>-0.3</td>
</tr>
<tr>
<td>Net FDI/GDP</td>
<td>1.1</td>
<td>0.4</td>
<td>0.5</td>
<td>-0.5</td>
<td>-1.3</td>
<td>-0.4</td>
<td>-0.3</td>
<td>-0.3</td>
<td>-0.3</td>
<td>-0.3</td>
</tr>
<tr>
<td>Net portfolio equity inflow/GDP</td>
<td>-1.3</td>
<td>0.1</td>
<td>1.3</td>
<td>2.9</td>
<td>3.1</td>
<td>3.1</td>
<td>1.3</td>
<td>1.3</td>
<td>1.3</td>
<td>1.3</td>
</tr>
<tr>
<td>Gross external financing needs/CARs plus usable reserves</td>
<td>100.7</td>
<td>104.5</td>
<td>109.6</td>
<td>107.5</td>
<td>110.4</td>
<td>106.2</td>
<td>101.9</td>
<td>102.6</td>
<td>103.1</td>
<td>103.6</td>
</tr>
<tr>
<td>Narrow net external debt/CARs</td>
<td>3.7</td>
<td>21.5</td>
<td>19</td>
<td>26.6</td>
<td>21.9</td>
<td>16.6</td>
<td>16.1</td>
<td>18</td>
<td>20.2</td>
<td>21.6</td>
</tr>
<tr>
<td>Net external liabilities/CARs</td>
<td>31.2</td>
<td>42.7</td>
<td>11.1</td>
<td>20.3</td>
<td>-40.4</td>
<td>-49.1</td>
<td>-36.7</td>
<td>-35.5</td>
<td>-29.2</td>
<td>-23.3</td>
</tr>
<tr>
<td>Short-term external debt by remaining maturity/CARs</td>
<td>27.1</td>
<td>29.4</td>
<td>37.9</td>
<td>37.2</td>
<td>49.1</td>
<td>47.2</td>
<td>35.1</td>
<td>34.5</td>
<td>33.5</td>
<td>32.4</td>
</tr>
<tr>
<td>Usable reserves/CAPs (months)</td>
<td>3.7</td>
<td>4.1</td>
<td>4.3</td>
<td>4.4</td>
<td>5</td>
<td>5.2</td>
<td>4.7</td>
<td>4.6</td>
<td>4.4</td>
<td>4.2</td>
</tr>
<tr>
<td>Usable reserves (mil. $)</td>
<td>48,923</td>
<td>50,688</td>
<td>49,696</td>
<td>49,094</td>
<td>45,891</td>
<td>48,669</td>
<td>49,013</td>
<td>49,364</td>
<td>49,004</td>
<td>49,373</td>
</tr>
</tbody>
</table>

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