Heineken keeps it green
Beer after completing your snake relocations? Sounds good
Market commentators and journalists often talk quite glibly about companies developing solar plants and other renewable energy projects to reduce their dependence on Eskom. It’s as it if is merely a case of throwing together a few panels and pressing the launch button, when in fact a lot more goes into these developments than is realised. This was illustrated to great effect this week by the South African unit of Dutch brewing giant Heineken when it officially unveiled its 6.5MW solar plant, which will supply almost a third of its electricity needs at its Sedibeng brewery in Midvaal.
The plant, which is Heineken South Africa’s biggest green energy project to date in the country, is part of the global group’s commitment that its breweries must be carbon neutral by 2030 in terms of production, and neutral in terms of their value chain by 2040.
Built by renewable energy group Sola for more than R100 million, the size of the plant – roughly 19 rugby fields – boggles the mind, and yet it was built within seven months, generating a total 127 jobs, with 100 of them filled by people who live in Sedibeng. The job opportunities included technicians, construction teams, general workers and people from the community who attend to solar panel cleaning and vegetation control to make sure the plant performs at its best.
But by far the most unusual problem encountered were the numerous snakes, including some venomous species, that had made the site at Sedibeng their home.
Heineken says it tried to relocate the snakes as close as possible to their natural habitat and none of them were harmed. Among the snakes were Night Adders, Rinkhals, Aurora, Spotted Skaapstekers, as well as Red-Lipped, Mole and Brown House snakes.
While this scenario may be heaven to someone like famed tattooed snake catcher Simon Keys, whose Snakes in the City programme enthralls viewers on DStv on a weekly basis, the same cannot be said for your average person, whose skin crawls at the mere mention of our slithering friends.
And yet Heineken and Sola ensured all the snakes were safely moved to adjacent Heineken land away from the solar PV trackers and employees and construction teams.
Such interventions by companies like Heineken are to be welcomed, and it is imperative that others with big balance sheets also start looking at ways to increase their renewable energy initiatives, especially if we want to leave a sustainable world to future generations.
It is important that when launching these types of projects, the flora and fauna are left as untouched as possible. It also means wearing long pants, socks and protective clothing, and being on the lookout for the odd snake or two in the grass.
What is there to say?
Positive budget, complex country
Either Finance Minister Enoch Godongwana is unfamiliar with the (possibly apocryphal) tale of Boris Yeltsin and John Major, or he is a master of subtext.
The story goes like this: sometime in the mid-1990s, Major, then British Prime Minister, asked Yeltsin, then Russian President, to describe that country's economy in one word.
"Good," Yeltsin reportedly said.
"And in more than one word?" Major asked.
Pause. "Not good," Yeltsin replied.
Yeltsin's dry response was not without context, of course. Revolutions, as more than one scholar has pointed out, spark a temporary crash in state capacity and institutions, presenting a typically small window during which legislators can implement structural reforms and cement longer-term political and economic stability. Spoiler: usually, they don't. The results are repented at leisure.
Fast forward to SA in 2022. The medium-term budget policy statement, delivered on Wednesday, drew largely uniform responses from analysts: a tone of cautious optimism sealed with more than a little wariness. Working with windfalls, plugging some of the right holes. Godongwana is walking the tightrope well, but it's still a tightrope.
So the minister, whether he realised it or not, delivered a rather more layered response than he intended when was asked to describe the medium-term budget policy statement last week and he gave that one-word answer: "positive".
Maybe, Minister. But the bar is also pretty low at this point. And with so many weighty questions left unanswered in the longer term, it's just as well nobody asked for more than one word.
What are the tax revolt metrics?
Taxes can be exciting, you know
It would be unfair to say the medium-term budget policy statement last week was full of reasons to press ahead with a tax revolt. SA’s debt-to-GDP is looking better than expected (thanks mining sector), there were no nasty surprises in terms of tax hikes, and there are signs of follow through on state promises of fiscal consolidation, as well as combatting financial crimes (why pay your rates and taxes if your local politicians don’t and possibly, allegedly, even at the highest level).
Instead, SA got a sober assessment and trustworthy statistics, as well as thankful prayers by at least some that local politics doesn’t seem to be setting the stage for a macroeconomic environment such as Sri Lanka’s, or Turkey’s.
But how are things really looking?
According to this interesting journal article (which does seem to err at one point; SA is not among the top ten countries with the highest tax-to-GDP ratios) those on tax revolt watch should consider five factors, namely: high unemployment, excessive tax burden, high inequality, high inflation and high indebtedness.
Inequality is tricky, as fresh gini statistics are hard to come by (the budget defines this, but then doesn't mention it). But things did get a little better between 2001 and 2018 (while still remaining awful), according to a 2022 World Bank report on the issue. That report went on to note, however, that in SA social grants are a major mechanism of reducing it. So, the continuation of social relief of distress grant, 7.4 million people, should help.
Excessive tax burden? An ongoing issue for sure for SA’s tiny tax base, private health, private security, private education etc ... but hardly could be said to be worsened by the budget, though rapidly rising utility costs, even as delivery remains erratic, generates plenty of anger and service delivery protests.
High inflation? Yup, but it peaked in July, it seems (except for food, worryingly). It is also hardly the government's fault; it is a global issue, though that may not help much.
High indebtedness? Trickier - there are troubling signs, such as lenders tightening their criteria, and debt seems to be picking up. Many have noted the surprising resilience of the consumer in 2022, though, and the Reserve Bank said in October that cash and deposits held by households were well above the averages of the past decade, and reflect the still unspent transfers received during Covid-19.
Unemployment? Better, if still tear-your-hair-out high - 33.9% in the second quarter, a 0.6 percentage point improvement. Although a mild labour market recovery may occur in the near term, medium-term prospects for employment growth remain weak, limiting personal income tax projections, the Treasury says.
So overall the trends don't look that bad, or at least the bad stuff in the trends isn't that new, scary maize and vegetable oil prices aside. But then, why speculate on one big tax revolt when there are successful ongoing tax revolts? Gauteng motorists seem to have won their battle over e-tolls, though not officially, but it does seem the writing is on the wall. I mean, honestly, try get people to pay for e-tolls. Gauteng Premier Panyaza Lesufi has thrown his backing behind Soweto residents not paying for electricity, and Eskom has been writing off some of that debt already. Helen Zille is also available to throw bags of electricity bills into Cape Town harbour (basically), if the corruption picture doesn't start looking a bit better, while there is also trade union Solidarity, who also thinks governments should be afraid of their people.
So, there are some high profile options for tax revolt leaders, at least, but a brief look at the numbers and the tone of the budget does seem to suggest that, overall, the issue of people not paying for stuff will remain where it belongs - at the ballot box.
The lights keep going out, though, and with the government increasingly looking like it will need continue to reshuffle that SOE debt, from state guaranteed debt into just state debt, who knows. It does seem that the government will need to follow through on its promises to tackle corruption, however, as while many may be willing to render unto Caesar, few want to render unto Nero.
Tweet of the day
Minister Godongwana we truly appreciate how you respect negotiations. Can we safely assume that the Soweto Eskom Electricity debt and that of other townships is also scrapped as per our intensive lobby? To start developing townships the debt must also go.— Panyaza Lesufi (@Lesufi) October 27, 2022
Chart of the day
Numbers of the day
Number of Red Bull cans sold in 2021, more than one per person on the planet. The Swiss company's revenue jumped 24% to 7.8 billion euros. (Bloomberg)
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