Tito Mboweni said his emergency budget would address debt as well as gathering money tot fight COVID-19.



&#8220;We have accumulated far too much debt.This downturn as severe as it is will make it worse. Out of every Rand we collect in tax 21 cents will go to paying debt,&#8221; says the finance minister.



&#8220;This Hippo is eating or children&#8217;s inheritence and we have to do all we can to close its mouht.&#8221; 



&#8220;We have flattened the curve and saved many lives. As a farmer will tell you when the storm is raging you have to protect you plants&#8230;.the storm shall pass,&#8221; says Mboweni.



The once mighty South African economy could contract by between 7 and 16 % this year losing more than a million jobs in the process.



&#8220;I think we can forget about growth this year and probably next year,&#8221; Isaah Mhlanga, the chief economist at Alexander Forbes, told CNBC Africa. 



Mboweni has to find at least R130 billion to shore up a gap in finance an a R500 billiion stimulus package to help the South African economy weather the COVID-19 pandemic. 



Despite huge spending gap that Mboweni has to bridge t, economist Azar Jammine reckons the finance minister won&#8217;t tinker with tax.



&#8220;My view is he probably won&#8217;t do so. The amount of additional revenue you might collect would be a drop in the ocean, if you think that increasing VAT by one per cent would merely raise R24 billion which is a minute amount compared to what is needed,&#8221; says Jammine.



South Africa has been borrowing more than a billion Rand a day to keep the economy afloat through the issue of bonds.



&#8220;The question I have is this appetite for buying debt, I think the longer the bonds are issued in these volumes the less the appetite is likely to be,&#8221; says Annabel Bishop, the chief economist at Investec.

PRETORIA, SOUTH AFRICA - MARCH 16: Finance minister, Tito Mboweni briefs the media on the details of government interventions in various sectors of the departmental portfolios on COVID-19 at DIRCO Media Centre.

106468131-1585649490275gettyimages-1207457483

COVID-19: “This Hippo is eating our children’s inheritance”Tito Mboweni on debt in the emergency budget

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Finance minister Tito Mboweni will have the difficult task of coming up with a budget to save South Africa’s economy. But tension has already started last week when South Africa Reserve Bank governor, Lesetja Kganyago announced its resistance to finance the growing budget deficit. On top of this the South African government has told asset managers and banks that they need R1.5 trillion from over the next decade for infrastructure. Jason Lightfoot, Portfolio Manager for Futuregrowth Infrastructure &#038; Development Bond Fund joins CNBC Africa for more.

SA seeks R1.5tn for infrastructure boom

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Finance Minister Tito Mboweni’s warning of a bleak budget sets the tone of what is to come from Wednesday’s speech. Receiving a R173 billion boost from the New Development Bank, having to reprioritise R130 billion to fund part of the government’s stimulus package, billions of relief programmes that has paid out and many more standing with cupped hands asking for help, what else can we expect to come out from Wednesday’s budget? Nolan Wapenaar, Co-Chief Investment Officer for Anchor Capital and Bernard Sacks, Tax Partner at Mazars joins CNBC Africa for more.

#SpecialBudget2020: Will finmin Mboweni’s emergency budget meet expectations?

In order to help <a href="https://www.cnbcafrica.com/coronavirus/2020/04/25/these-are-the-sectors-sa-is-considering-reopening-in-phase-4/">small and medium enterprises</a>, support the <a href="https://www.cnbcafrica.com/videos/2020/04/24/sa-economy-to-begin-a-gradual-reopening-on-1-may/">economy</a> and save jobs, the South African Reserve Bank (SARB) and the National Treasury are partnering with members of the Banking Association South Africa (BASA) to roll out a <a href="https://www.cnbcafrica.com/videos/2020/04/24/is-r800bn-stimulus-enough-for-markets/">R200 billion Covid-19 loan scheme</a>.



The scheme will allow qualifying <a href="https://www.cnbcafrica.com/article/2020/04/28/how-10000-covid-19-hit-companies-blundered-and-missed-out-on-millions/">businesses</a> to apply for loan funding from their primary bank for three months of operational costs, such as salaries, rent and supplier payments.



The statement below provides more details:



Covid-19 Loan Scheme for Small and Medium Enterprises



The R200 billion Covid-19 loan scheme is the outcome of the South African Reserve Bank (SARB) and the National Treasury partnering with members of the Banking Association South Africa (BASA) to help small and medium enterprises, support the economy and save jobs. The scheme will allow qualifying businesses to apply for loan funding from their primary bank for three months of operational costs, such as salaries, rent and supplier payments. All loans will be subject to bank credit approvals.



The Covid-19 loan scheme is a special credit facility that is being disbursed on behalf of SARB and National Treasury, using the infrastructure of the banking industry. Risk-sharing mechanisms in the scheme balance the need for government to support qualifying businesses, with ensuring the continued safety and soundness of the banking system. Similar schemes have been rolled out in over 50 countries in recent weeks.



Funding for these Covid-19 loans will be provided to banks by the SARB through a special financing mechanism. Any losses on the loans will first be offset against any margins earned on a bank’s portfolio of Covid-19 loans. Losses thereafter will be offset against a guarantee fee payable to the National Treasury by banks. Any further losses thereafter will be shared, with the first six percent being absorbed by the banks and the net balance absorbed by the National Treasury. Each bank will sign a bilateral agreement with the SARB, covering their participation in the scheme. The SARB will in turn contract with the National Treasury.



The scheme – which will start with an initial R100 billion &#8211; will be launched as soon as all the necessary legal agreements are in place. All parties are working around the clock to implement the scheme as quickly as possible after these agreements are finalised. While the finer details of the Covid-19 loan scheme and the related application process are still being finalised, the following principles will apply:



<ul><li>The Covid-19 loan scheme is a commercial arrangement and requires a credit application process, through which banks must evaluate if the business will likely be able to service all its commitments after the pandemic and lockdown. Banks are not obliged to extend Covid-19 loans and business owners may be required to sign surety.</li></ul>



<ul><li>The size of the Covid-19 loan will be calculated on the three-month funding requirement of certain operating expenses of the business, as approved by the bank, to be disbursed in monthly tranches.</li></ul>



<ul><li>Banks will not profit from the provision of the SARB guarantee. However, the administrative cost of facilitating the loans and the cost of capital will be recovered.</li></ul>



<ul><li>In the event of default, the Covid-19 loan would be subordinated to all other creditor claims.</li></ul>



<ul><li>The repayment of shareholder loans or dividends, using these funds, is expressly prohibited.</li></ul>



To qualify for the standardised Covid-19 loan, businesses, including sole proprietors, must inter alia:



<ul><li>Have a turnover under R300 million per annum</li></ul>



<ul><li>Be in good standing with their bank, prior to the onset of the Covid-19 pandemic</li></ul>



<ul><li>Be registered with the tax authority</li></ul>



<ul><li>Have insufficient normal borrowing capacity to fully fund its monthly operating expenses</li></ul>



<ul><li>Be adversely impacted by the lockdown.</li></ul>



Companies that may qualify for a Covid-19 loan, are advised to contact their primary bank. The launch date of the scheme and further details are expected to be announced shortly.



During the initial phases of the scheme, some processing backlogs will be inevitable. Banks undertake to work though these as quickly as possible and ask clients to be understanding of the challenges our staff have operating in the lockdown.



The R800 billion economic relief and stimulus package announced by President Cyril Ramaphosa and the Minister of Finance, Tito Mboweni, is an urgent and necessary part of saving lives and livelihoods, as the country unites to curb the pandemic. It will do much to alleviate poverty, hunger and uncertainty in our communities.



As important as they are, these emergency measures are not a sustainable solution to the devastating social and economic damage caused by the pandemic. We call on the President to urgently implement the ‘third phase’ of his economic recovery strategy: infrastructure development, structural reforms and sustainable transformation, to kickstart inclusive economic growth, create jobs and boost consumer and investor confidence. We need to rebuild a new and better economy for all South Africans. We hope these measures will be reflected in the extraordinary budget, which is yet to be announced. It is essential for both lives and livelihoods that we safely and fully reopen the economy as soon as possible.



Issued on behalf of The Banking Association South Africa



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

ArcelorMittal South Africa fined R3.64 million over hydrogen sulfide emissions

How SA’s R200bn Covid-19 loan scheme for small businesses works

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Joining CNBC Africa for a look at the local markets is Dale Hutcheson, Fund Manager, Absa Asset Management.

Is R800bn stimulus enough for markets?

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While governments try to boost their economies with trillions of dollars in stimulus packages to fight COVID-19, hackers are trying to stimulate their pockets. The number of cybercrime cases related to the coronavirus is rising and to tell us how hackers are doing this CNBC Africa spoke to Pankaj Bhula, Regional Director Africa, Check Point.

COVID-19 Stimulus: How to avoid giving money to hackers

By Monique Vanek



South Africa is talking to most of the world’s multilateral institutions for money to help dig it out of the economic hole created by COVID-19 pandemic and its 35-day lockdown. This was the word from Finance Minister Tito Mboweni when asked by CNBC Africa about the multilateral institutions.



“We will leave no stone unturned,” he said.



This morning we had discussions with the World Bank, we are also speaking to the New Development Bank, the International Monetary Fund and African Development Bank, he revealed.



READ: <a href="https://www.cnbcafrica.com/coronavirus/2020/04/14/covid-19-sa-economy-to-shed-a-million-jobs-and-shrink-by-up-to-10-per-cent/">COVID-19: SA economy to shed a million jobs and shrink by up to 10 per cent</a>



Tshepiso Moahloli, acting head of asset and liability management at Treasury said that the loans need to make sense for the country.



Mboweni added that South Africa is not looking for budget support but for COVID-19 packages.



“We do not want funding that is accompanied by structural adjustment programmes,” he added.



Tomorrow we will know more



The economic cluster will on Wednesday meet with Cabinet before unveiling its stimulus package for an economy that has changed beyond all recognition.



Likely to be announced is an adjustment to the old age pension grant.



Below is a statement from Treasury that it released today…



Introduction



The COVID-19 pandemic is one of the greatest challenges that has ever faced our nation.



It is three simultaneous shocks. It is a health shock, which will stretch the resources of our health care system to its limit. It is a global economic shock, which will substantially reduce global growth and consequently external demand, and it is a domestic economic shock, because our domestic policies will reduce economic activity, both from a demand side and a supply side.



In situations such as this, we know that the health and lives of our fellow South Africans must come first. An out-of-control pandemic would hit the economy extremely hard.



It is increasingly clear that, led by our President, we have chosen the right path.



The figures presented by the Minister of Health and his team yesterday show that we are indeed ‘flattening the curve’. Across the world, As of 10.30 am this morning, globally there have been 1.9 million coronavirus cases, and 119,806 deaths. 453,308 people have recovered.



In South Africa, we have kept cases down and deaths down.



Our curve is not rising exponentially, indeed at this point it has a welcome kink.



President Ramaphosa has extended the lockdown by a further two weeks until the end of April. We continue to reiterate pleas calling on all South Africans to stay at home unless it is necessary for them to be outside.



The health of our people, and their lives, must come first. But we must also ensure that we protect their livelihoods.



The economic outlook



Our health approach to this lockdown is ‘data-dependent’. Similarly, our economic response will be data-dependent, and we will evaluate and update our response on a continuous basis.



A short while ago, the Monetary Policy Committee reduced interest rates by a further 100 basis points. Their flexibility, and willingness to act speedily is similar to the approach of many other central banks.



Going into this health care crisis, the economy was already in recession. Without doubt, given what we know since February, COVID-19 will certainly further deepen the South African downturn woes.



Our internal scenario planning has mapped out the economic impact of different lockdown scenarios, together with the consequent different paths for the fiscal deficit, for government borrowing and for the fiscal response.



At this stage, our central scenario is for a deep recession in 2020, followed by a rapid upswing in economic growth.



Critically, the path relies on an understanding of how the global economy will adjust.



We are in constant conversation with the teams at multilateral bodies, domestic and local economists, and of course the South African Reserve Bank. We are also monitoring domestic and global high frequency data to ensure that we understand as well as we can the ongoing evolution of the economy. Our sophisticated banking and payment system provides us with near real time payment data. This shows a substantial fall in transactions in retail, hospitality and food and drink. There was a spike in activity in food (and alcohol) sales prior to the lockdown, and in the first weekend of the lockdown, but these have now settled. In addition, there was large ATM activity in the first weekend, but now things have normalised.



This provides inputs into our forecasting process. The forecasts we have been receiving so far vary from the optimistic to the deeply pessimistic.



On the relatively optimistic side, the Organisation of Economic Cooperation and Development (OECD) has highlighted that economic growth in South Africa will shrink by less than other emerging markets, in part because South Africa is not a net oil exporter.



The International Monetary Fund’s April 2020 World Economic Outlook will be released later today. Current estimates from the IMF show global growth contracting this year by about 2.9%. For South Africa, their initial estimate was for an economic contraction of 5.8 per cent. Other estimates vary.



The most recent official sector forecast is that issued by the South African Reserve Bank a few minutes ago. The Bank expects GDP in 2020 to contract by 6.1%, compared to the -0.2% expected just three weeks ago. GDP is expected to grow by 2.2% in 2021 and by 2.7% in 2022.



The Bank’ s headline consumer price inflation forecast averages 3.6% for 2020, 4.5% for 2021, and 4. 4% in 2022. The forecast for core inflation is lower at 3.8% in 2020, 4.0% in 2021, and 4.2% in 2022.



But like I have alluded to in the past, every crisis is an opportunity for us to address our problems and challenges.



The pandemic, and the response to the pandemic, will cause major disruptions to global supply chains. Lockdowns in many countries will reduce consumption, and consequently global demand. This will reduce our exports. Global growth has been revised sharply lower. Our economy is also highly dependent on services, particularly tourism. These will be affected by the global travel ban. These are only two examples of how we will be affected by a complex and unfolding global emergency.



As a small open economy we regularly experience external shocks. For this reason, we have chosen a flexible exchange rate, and monetary policy that is anchored by an inflation target.



This approach has served us well in the past, through many crises, and it is serving us well at present.



In line with the experience of other emerging markets – and similar to other shocks we have experienced in the past – the exchange rate has depreciated significantly and bond yields have risen. Despite historic levels of volatility, the National Treasury has continued borrowing in the domestic market, albeit at record high yields. Due to Treasury’s prudent long-term borrowing strategy, these higher yields will only slowly feed through into higher borrowing costs. In addition, Government has significant cash buffers available. These can be deployed should there be a significant prolonged disruption in markets.



PHASE 1 OF THE ECONOMIC POLICY RESPONSE



When the lockdown was announced, we acted immediately to announce a set of Phase 1 economic measures.



These included:



<ol><li>Immediate release of fund to where they were needed</li><li>An Instruction Note 8 of 2019/20 applicable to Public Finance Management Act (PFMA) institutions and a Municipal Finance Management Act (MFMA) Circular 100 for municipalities and municipal entities, to speed up the procurement of goods/commodities required to reduce and control the spread of the virus.</li><li>A first set of exceptional tax measures as part of the fiscal package. These measures are over and above the tax proposals made in the 2020 Budget on 26 February 2020. The tax adjustments are made in light of the National State of Disaster and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus.</li><li>The Office of the Auditor General announced a conditional Exemption Notice in order to ensure effective and efficient service delivery and to minimise any potential delay in decision making. The conditional Exemption Notice will also facilitate and enable legislative processes during the period of the national state of disaster.</li></ol>



All these measures are available on the National Treasury’s website.



Banking and finance market interventions



The banking and finance industry have also taken a steps to help ease the impact of COVID-19



South Africa has a safe, sound, well-regulated and resilient financial sector. We have deep and liquid markets. Since the global financial crisis, we have taken steps to strengthen the banking system, including increasing capital, improving liquidity and reducing leverage. As a result, the banking and financial system is particularly resilient.



To support the real economy, the following steps have been taken by the South African Reserve Bank:



Enquiries: Communications Unit Email: media@treasury.gov.za Tel: (012) 315 5046



<ol><li>In line with its Constitutional mandate, the South African Reserve Bank cut the repo rate initially by 100 basis points and an additional 100 bps a short while ago. This will put money straight back into the economy. 2. The Bank has also proactively provided additional liquidity to the financial system. This includes purchasing of government bonds in the secondary market to ensure that there is sufficient liquidity in the government bond market. 3. Regulatory requirements are expected to release lending of up to R550 billion into the economy, including a reduction in capital requirements of R30.7 billion in capital and a reduction in liquidity requirements. In addition, up to R3 trillion in total exposures will benefit from changes to rules around restructuring. 4. Guidance to reduce dividends and bonuses will ensure that banks use capital wisely.</li></ol>



As the President highlighted in his address, Many large institutions have used force majeure to stop paying suppliers. Those who can, should continue to pay (on top of salaries) their suppliers and rentals, to ensure that the underlying economy continues to function and to focus support on those small businesses that really need them. The measures we have announced will assist with cash flow, the aim is to maintain productive capacity, and income for employees.



Banking In the spirit of working together with Government, the largest banks have announced a number of measures to help their customers, including Instalment reductions, interest and fee deferrals, extension of loan terms, processes to help qualifying customers access debt relief packages like the South African Future Trust and government SME relief schemes, fee waivers and other relief efforts. Insurance Insurance companies have made a number of interventions. These vary across different companies, such as:  Premium holidays and premium deferrals on a case by case basis  Paying suppliers in shorter periods to assist with improved cash flow in the system.  Pre-payment of claims or parts thereof before final assessment and increasing the “grace” period for premium payment.  Business interruption claims due to COVID-19 to be considered on a case by case basis, and working on clear guidance on how pandemic exemptions will work



Enquiries: Communications Unit Email: media@treasury.gov.za Tel: (012) 315 5046



 Reduced excesses; and  Leniencies on missed debits



PHASE 2 OF THE ECONOMIC POLICY RESPONSE



This was only the first phase of our response. In light of our data-dependent approach, we are working tireless to develop an a phase 2 set of interventions.



Most importantly, the crisis is an important opportunity for government to implement structural reforms to: Restructure the network industries; Liberate SMMEs to be the engines of growth and employment; and Broad-based measures to lower the cost of doing business.



We will naturally revise our fiscal framework to take into account the effect of COVID19 on the fiscus. There are a number of elements to our fiscal response: 1. Putting forward clear estimates of the additional health care costs that will be needed 2. Reprioritising unnecessary expenditure towards these health care costs 3. The impact of slowdown on our projections for revenue 4. It should be costed as much as possible (how much is needed?); 5. It should be temporary (clear timeline of 1 year); 6. It must be crafted as a 3rd line of defence for the vulnerable 7. A clear timetable or plan to stabilize debt over the current forecast period 8. Supported by an economic recovery plan (structural reforms) and a set of reforms within the fiscal system e.g. passing the RABS (road accident benefit scheme), consolidation of public entities and closure of SAA and SAX



Together with my colleagues in the economic cluster, have put together a few proposals on how we can further grow the economy. These will announced shortly. Amongst the measures we are looking is expanded support for SMME lending through the banking system, similar to in other countries.



Government, through National Treasury, is exploring all funding avenues to finance all Covid-19 related programmes and measures aimed at addressing the pandemic. The funding avenues will not be limited locally, but will include exploring all global partners and international finance institutions. Funding transactions will be announced officially once concluded.



Going back to opportunities emerging from this crisis, we as government have reiterated, the commitment to implement structural economic reforms to address the weak economic growth, constrained fiscus and ailing state-owned companies.



The Covid-19 pandemic and measures taken to address its spread have had a substantial negative impact on economic growth and government’s fiscal position.



The Pre-existing fiscal position was precarious, and we must ensure that whatever we do does not harm our long-run fiscal sustainability. The fiscus’ ability to respond to crisis is weak.



The 2020 Budget was already mildly expansionary and supportive of growth. In particular, the fiscal consolidation path was designed to strengthen our fiscal health. Fiscal health is a necessary, but not sufficient condition, for sustained growth.



Several priority areas were growing at above inflation rates including capital spending.



Nevertheless, given the current crisis, a higher deficit may be accommodated if it is a) temporary and b) if reprioritized spending is directed towards crisis (health) response, and direct fiscal support to the most vulnerable. The other parts of the package involve the drawing down of existing surpluses (e.g. UIF) or increasing the contingent liability of government (guarantees) But it is absolutely critical , now more than ever, to focus on raising long-run growth.



Beyond the Covid crisis, a major risk facing the economy and the fiscus is if long-run economic growth returns to the pre-crisis averages of between 1 to 2 percent. Higher levels of economic growth need to become a non-negotiable objective.



In the absence of urgent structural reforms, the considerable fiscal actions to mitigate the current crisis may leave the fiscus on at the edge of a cliff. For example, we must, without any hesitation, act to implement the President’s announcements on electricity, and rapidly work to implementing the range of reforms that we had already



Let me stop here, and hand over to Mashudu to take your questions.

COVID-19: SA will leave no stone unturned in obtaining funding from multilateral institutions to assist its economy – Finmin Mboweni

By The South African Treasury 



Government notes the <a href="https://www.cnbcafrica.com/insights/sa-downgrade/2020/03/27/moodys-downgrades-sa-to-junk/">decision by Moody’s </a>to downgrade South Africa’s long term foreign and local currency debt ratings to ‘Ba1’ from ‘Baa3’ and maintain the negative outlook. South Africa’s credit ratings by Moody’s are now one notch below investment grade. 



According to Moody’s, the following are key drivers behind the downgrade: 



<ul><li>Structurally very weak growth and constrained capacity to stimulate the economy. </li><li>Inexorable rise in government debt over the medium term. </li></ul>



The negative outlook reflects the risk that economic growth will prove even weaker and the debt burden will rise even faster and further than currently expected, weakening debt affordability and potentially, access to funding. 



The decision by Moody’s could not have come at a worse time. South Africa, like many other countries, is seized with containing the outbreak of the <a href="https://www.cnbcafrica.com/covid-19/">coronavirus</a> (COVID-19). The impact of COVID-19 is felt across various sectors of the economy including the financial markets which experienced a significant sell-off in equities, bonds and exchange rates as investors retreated to safe haven securities amid the uncertainty. 



The sovereign downgrade will further add to the prevailing financial market stress. These two events will truly test South African financial markets. South Africa’s deep, stable financial sector and robust macroeconomic policy framework have always been flagged as a credit strength, including the South African Reserve Bank’s demonstration of a good track record in implementing credible and effective monetary policy and preserving financial stability. 



The sovereign downgrade will further see South Africa being excluded from the FTSE World Government Bond Index (WGBI) and the government bond market will experience further capital outflows as fund managers with investment grade mandates will be forced to sell South African government bonds. Non-residents currently hold approximately 37% (R800 billion) of the total domestic government bonds and the number is expected to substantially decline with the combined impact of COVID-19 and the downgrade. The interest rate for government, households and the broader economy is also expected to increase as a result. While some market participants argue that the impact of a sovereign downgrade has already been priced in, it is difficult to stipulate with certainty the extent. 



“Therefore, to say we are not concerned and trembling in our boots about what might be in the coming weeks and months is an understatement,” Minister of Finance, Mr Tito Mboweni, said. 



In the immediate period, South Africans under the leadership of his excellency Mr Cyril Ramaphosa have rallied together to fight COVID-19 to ensure South Africa emerges triumphant from the pandemic. The President announced a number of measures to offset the COVID-19 impact on the economy and its people including a 21-day lockdown which commenced on March 27 to combat the spread of the virus. In relation to financial markets functioning, the South African Reserve Bank has also announced a set of interventions to stabilize financial markets and provide much-needed stability. 



In addition, over the short to medium term, government remains committed to implementing structural economic reforms to address the weak economic growth, constrained fiscus and the ailing state-owned companies. Government is providing medium-term support to Eskom to secure energy supply and to honour the state’s contractual obligations. National Treasury, in partnership with the Department of Public Enterprises, is instituting a series of measures to stabilise finances at the various stateowned companies. The sustainability of government finances remains important and critical to attain and maintain, not only for credit ratings’ sake, but more importantly for the sake of South Africans. 



“It is with a heavy heart to note that all three major credit ratings agencies currently rate South Africa at sub-investment grade. However, every crisis presents an opportunity. The opportunity we have today is to unite and work together to address our challenges. We as a people have overcome insurmountable challenges in the past and we can still overcome. We shall rise. We have to rise. We owe it to ourselves,” Minister Mboweni said. 



Government urges all South Africans to unite, remain positive and continue to work handin-hand to turn the economy around.

Government’s response to Moody’s downgrade of SA to junk status

NAIROBI/ADDIS ABABA (Reuters) &#8211; Kenyan authorities raided a shop on Monday that was alleged to be selling fake coronavirus testing kits, as the World Health Organisation confirmed there were at least 327 cases on the African continent.



Police detained staff and locked the facility, witnesses told Reuters journalists at the scene, after the shop had been advertising testing kits online. 



In West Africa, the small and impoverished nation of Liberia announced its first case on Monday, meaning that 27 African nations are now treating patients with coronavirus. The disease has killed 6,509 people and infected almost 170,000 people worldwide, according to a Reuters tally. 



Ethiopia, Africa’s second-largest nation, joined the growing list of countries that closed schools for two weeks, suspended all large gatherings and cancelled all sports events, Prime Minister Abiy Ahmed’s office said. 



Free rides will be available on government buses to curb overcrowding in the public transport system, a statement said. 



“The Prime Minister calls upon all to maintain calm and equip themselves with accurate information from the Ministry of Health,” Abiy’s office said. 



Nigeria’s health ministry said the country, Africa’s most populous, had taken additional measures including strengthening contact tracing, stockpiling reagents used in test kits and increasing testing capacity. 



Many African nations, including some without reported cases, have ordered tougher control measures, including bans on public gatherings, halting flights and closing schools and universities.



South African Finance Minister Tito Mboweni said on Monday that despite having some money available for coronavirus response through the National Disaster fund, the government may need to earmark further funding. 



“As the situation develops we will need to set aside further funding, that means we will have to reduce programmes throughout the government system by reducing the allocated amounts,” Mboweni said at a conference outlining new measures to contain the outbreak. He did not provide any figures. 



The number of cases in Rwanda increased to five on Monday, and Burkina Faso’s health ministry said that eight new coronavirus cases had been confirmed, bringing the total there to 15 since March 9. [nL8N2B90NF] 



(Reporting by Giulia Paravicini, Baz Ratner and David Lewis in Nairobi, Juliette Jabkhiro in Dakar, Clement Uwiringiyiman in Kigali; Olivia Kumwenda in Johannesburg and Elias Biryabarema in Kampala; Writing by George Obulutsa; Editing by Katharine Houreld and Giles Elgood)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/topNews/idAFKBN2131LL-OZATP">https://af.reuters.com/article/topNews/idAFKBN2131LL-OZATP</a> and is republished with its permission.

Kenya raids shop selling fake coronavirus kits as Liberia confirms first case

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Following the announcement of a national disaster in response to COVID-19 by president Cyril Ramaphosa yesterday, most were left wondering if finance minister Tito Mboweni would be announcing a stimulus package today but instead this is what the minister had to say.

Finmin Mboweni on why interest-rate cuts are not the answer

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Cosatu General Secretary, Bheki Ntshalintshali and Xhanti Payi, Economist &#038; Lead Researcher at Nascence Advisory spoke CNBC Africa in light of Finmin Mboweni’s proposal to cut the state&#8217;s wage bill by R160.2 billion over three years.

Cosatu vs Mboweni over 2020 budget cuts

JOHANNESBURG (Reuters) &#8211; South Africa’s largest trade union federation COSATU said on Wednesday that it would not allow workers’ wages to be slashed, after Finance Minister Tito Mboweni used a budget speech to promise cuts to the public sector wage bill.



COSATU said in a statement that it was deeply angered by Mboweni’s budget, calling it “provocative” and “reckless”.



Reporting by Alexander Winning; Editing by Catherine Evans

Empty Wallet

SA trade union COSATU says it won’t allow workers’ wages to be slashed

By Kopano Gumbi, CNBC Africa markets reporter 



The national treasury has acknowledged that the risk to South Africa remaining investment grade has become more pronounced. A sharp increase in borrowing requirements, unstable electricity supply and reduced tax revenue collections have put strain on the nation’s fiscal position. 



<a href="https://www.cnbcafrica.com/insights/budget-day/2020/02/26/budget2020-sas-finance-minister-tito-mbowenis-full-speech/">READ:#Budget2020: SA’s Finance Minister Tito Mboweni’s full speech</a>



In the last year alone, the government’s gross borrowing
requirements increased by 21.4 percent to R407 billion. The government’s debt
requirements over the next two years will reach nearly R500 billion. The debt
to GDP ratio continues to rise, it is expected to be 65.6 percent of GDP by the
end of 2020/21.



“Although our budget deficit rises to 6.8 percent, we are nevertheless determined to bring it back,” asserts Mboweni.



READ:<a href="https://www.cnbcafrica.com/article/2020/02/26/budget2020-south-africans-get-a-tax-break-public-sector-wage-bill-cut/">#Budget2020: South Africans get a tax break; public-sector wage bill cut</a>



The majority of South Africa’s debt is through domestic loans but as the national treasury has stated, debt is not expected to stabilise over the medium term. A change in the country’s sovereign rating to sub-investment grade would lead to short-term volatility in the financial markets, including an increase in borrowing costs and exchange rate depreciation. The government is of the view that this would unlikely affect its ability to finance its medium-term borrowing requirements.



In trying to exercise more financial prudence, the
government would need to demonstrate that it has a handle on its state-owned
entities. According to government, it has allocated R162 billion to aid
financially stressed companies over the last 12 years. SAA, SA Express, SABC,
Denel and Eskom have been the biggest drain on the state’s resources. Eskom,
the embattled power utility, has received the lion’s share of this assistance.
The total debt of these entities amounts to R760 billion, with 62 percent
guaranteed by government. 



“Over the next three years, debt repayments total R178.1 billion,
of which R103.5 billion is held by Eskom,” estimates government. 



In the coming financial year, government has committed to
provide SAA with an additional R16 billion bailout over the medium term, even
though the company is in voluntary business rescue.



Eskom, which has debt of R450 billion, has received hundreds
of billions from the government and many proposals have been put forward to
assist the ailing power utility. Including, most recently, a proposal to use
the Public Investment Corporation as an investment vehicle. 



Minister Mboweni didn’t scoff at the idea of using public
funds to pay off a large portion of Eskom’s debt, saying that it was not a bad
idea.



“We must be clear that it’s not only public-sector pensions that will be used,” Mboweni said in an address ahead of the budget speech. “If we are going to use pensions, it must be all of our pensions.” This would include private pension funds. The minister outlined that discussions around this are developing and that role-players, in government and in the unions, are coming around to the idea. Mboweni said that this would now introduce the idea that public sector investment could start to happen in Eskom, a point that has been highly contested.

#Budget2020: Risk of SA remaining investment grade by Moody’s has become more pronounced

#Budget2020: SA’s Finance Minister Tito Mboweni’s full speech

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CNBC Africa spoke with the South African Minister of Tourism Mmamoloko Kubayi Ngubane on her vision for the opportunities that will arise from the 2020 Meetings Africa event as well as her message for finance minister Tito Mboweni in light of this afternoon’s budget announcement.

#MeetingsAfrica2020: Minister Kubayi-Ngubane on how SA can become a top business

#MeetingsAfrica2020: Minister Kubayi-Ngubane on how SA can become a top business, holiday destination & the impact of COVID-19

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Joining CNBC Africa to unpack what the legalisation of the marijuana industry and impact that this industry will have on South Africa is Martha Smith, Lawyer and Partner in the Life Sciences Group at Fasken and Paul-Michael Keichel, Partner at Schindlers Attorneys.

Unpacking SA’s bold plans to tap into the cannabis market

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CNBC Africa spoke to Barba Gaoganediwe, Head Destination Promotions &#038; Marketing, Gauteng and Jeanette Moloto, Director of Global Sales, Marriott International at the Meetings Africa event about the impact of COVID-19 on the events industry and their expectations from Tito Mboweni’s budget speech.

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Finmin Mboweni on why interest-rate cuts are not the answer

Cosatu vs Mboweni over 2020 budget cuts

SA trade union COSATU says it won’t allow workers’ wages to be slashed

#Budget2020: Risk of SA remaining investment grade by Moody’s has become more pronounced

#Budget2020: SA’s Finance Minister Tito Mboweni’s full speech

#MeetingsAfrica2020: Minister Kubayi-Ngubane on how SA can become a top business, holiday destination & the impact of COVID-19

Unpacking SA’s bold plans to tap into the cannabis market

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Tito Mboweni

COVID-19: “This Hippo is eating our children’s inheritance”Tito Mboweni on debt in the emergency budget

SA seeks R1.5tn for infrastructure boom

#SpecialBudget2020: Will finmin Mboweni’s emergency budget meet expectations?

How SA’s R200bn Covid-19 loan scheme for small businesses works

Is R800bn stimulus enough for markets?

COVID-19 Stimulus: How to avoid giving money to hackers

COVID-19: SA will leave no stone unturned in obtaining funding from multilateral institutions to assist its economy – Finmin Mboweni

Government’s response to Moody’s downgrade of SA to junk status

Kenya raids shop selling fake coronavirus kits as Liberia confirms first case

Finmin Mboweni on why interest-rate cuts are not the answer

Cosatu vs Mboweni over 2020 budget cuts

SA trade union COSATU says it won’t allow workers’ wages to be slashed

#Budget2020: Risk of SA remaining investment grade by Moody’s has become more pronounced

#Budget2020: SA’s Finance Minister Tito Mboweni’s full speech

#MeetingsAfrica2020: Minister Kubayi-Ngubane on how SA can become a top business, holiday destination & the impact of COVID-19

Unpacking SA’s bold plans to tap into the cannabis market

#MeetingsAfrica2020: How COVID-19 is impacting the events industry

News Tips

Advertise With Us

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