ESKOM MIGHT NEED TO BORROW R45 BILLION FOR DIESEL.

According to S&P Global Ratings, South Africa’s indebted power company, Eskom may need to borrow an additional R45 billion to buy diesel and give employees salaries that are higher than the rate of inflation.

Omega Collocott, Director of Corporate Ratings for South Africa at the firm, said it represents a 50% increase over S&P’s borrowing forecast for Eskom in November. According to a business presentation in November, the utility had a funding plan of R24.4 billion for the year ending in March.

Independent economist Elize Kruger says that the BankservAfrica Economic Transactions Index, which tracks interbank payments, climbed 3.9% in the second quarter from the first three months of the year and the underlying momentum in the economy might have been stronger than generally perceived.

Even though more power disruptions are anticipated to have a negative impact on economic growth this quarter, the removal of all Covid-19 rules at the end of June could be able to offset that effect.

“A further recovery towards pre-Covid activity levels in some sectors where restrictions still applied will support general economic activity in the coming months,” said Kruger.

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