Time is running out for South Africa

The amount of money being spent by Pick n Pay and Checkers on diesel during rolling blackouts is staggering, to say the least. One could say electrifying, but you would need electricity for that.

On Wednesday, Moneyweb reported Pick n Pay used nearly R380 million over 10 months to keep its shops open.

“It is clear that progress will not be rapid. The group therefore takes the view that the current crisis is a permanent new reality, requiring a rapid, determined and concerted response,” Pick n Pay said.

“The government needs … to come forward with a sustainable plan to solve the electricity crisis, including taking every step possible to ease the way for businesses to generate and use their own sustainable energy.”

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On Monday, Moneyweb reported Checkers spent an “additional” R560 million on diesel for generators, it says, “in order to trade uninterrupted during load shedding stages five and six”.

Pick n Pay’s share price fell 8.5% on Wednesday, after it said it is spending about R60 million a month on diesel and may have to reprioritise its capital investments as load shedding cost pressures mount.

Bloomberg is reporting Anglo American Platinum, the top platinum miner by value, said “investor payouts will drop as worsening power outages in South Africa curb output and push up costs”. And lest there be any doubt about it, we will end up paying for it, just as we pay 14% VAT, a 7.25% repo rate and increased fuel prices – including diesel – which affect farmers too.

Farmers have little choice in the matter; agriculture runs on diesel, as does transporting produce to markets and transporting that produce from market to shops. The plea for tax relief on solar for big business makes sense if it prevents prices from being jacked further through the roof.

However, as always, it does mean somewhere down the line ordinary citizens will have to cough up – and it’s not as simple as that, either.

Remember the furore about the brain drain? Now, it seems, there is a tax base drain happening simultaneously.

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The United Nations’ department of economic and social affairs reported recently 914 901 South African citizens emigrated between 2015 and 2022 – and it is people across the age and colour spectrum.

As EY chief economist for Africa Angelika Goliger noted in March last year, personal income tax (PIT) collection, the largest source of tax revenue in South Africa, has fallen in recent years.

“Between 2003 and 2012, the number of PIT taxpayers grew by 7.0%,” said Goliger. “Since 2012, however, some of these gains have been eroded with a -2.1% decline in the number of taxpayers, according to data from Sars.

“This is particularly worrying as there were only 5.2 million individual taxpayers in 2020.” Goliger wrote the decline in PIT was the “result of the weak economy, which has reduced the ability of firms to grow, increase salaries and hire people”.

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“The outlook for South Africa’s economy is expected to remain muted [GDP is expected to grow between 1.4% and 1.8% by 2023] and the unemployment rate has remained at untenable levels – so this trend is likely to persist.”

These are a few of the markers we see every day. If it hasn’t registered with you yet, we are in deep trouble. And the only thing we can do about it is vote in the 2024 elections. Tick tock…