• Last night the President unveiled South Africa's emergency energy procurement and supply plan.
• I am very happy to say, gone was the Eskom 2.0 idea. In its place is basically exactly what I suggested last week. Encourage private production that is plugged into the grid, and get it done quickly.
• There was also no mention of taxing producers who generate their own capacity.
• That idea was never going to work. Imagine, you have a veggie garden in your back yard, but you have to go and pay Woolies for every cabbage that you don’t buy from them.
• It’s the second time that the President has borrowed from my thinking. He did the same in this year’s State of the Nation address when he said it’s not the Governments task to create jobs.
• Its ok Sir, As a patriotic citizen I won’t make a claim against you. I am here to serve!!!
• Seriously though, this plan should go some way in addressing the needs of the Country. Obviously, it will take time for all of this to be implemented, but we have a plan, and a relatively good one.
• The ideologues will have a field day and we will hear lots of noise from the left about how the President has sold out to the free marketeers. And that’s fine. It’s a few steps in the right direction and now the trick is to get it done, and quickly, and efficiently.
• The missing piece of the puzzle remains Eskoms balance sheet, and the President has tasked the Finance Minister to come up that part of the plan.
• The other piece of the plan that irks somewhat is the idea that we need a special task team to tackle the saboteurs and criminals. The question needs to be asked. Seeing as this has being going on for years, why are the Law Enforcement agencies not currently equipped to deal with this?
• As my golfing partner used to say, there is many a slip between cup and lip. We need to move from theory and put into practice what has been planned. And no one should be allowed to derail the Country from this path.
• Let’s move our attention to forthcoming attractions.
• First up is the FEDs rate decision tomorrow. Basically they have 3 options available to them.
o A 50bp rate hike – less than 10% chance. But if they do The ZAR should rally hard in the wake of our own 75pip move last week.
o A 75bp hike – the consensus view
o A 100 pip move will put markets into a tail spin, especially if accompanied by further hawkishness.
• Then we have the ANC’s policy conference coming up. Turn down the volume, please. We can expect a fruit salad of ideas …..
o Reserve bank nationalisation.
o The land question
o Step aside
o Cadre deployment
o And perhaps a few new ones.
• The point is that it will be a noisy period. We will definitely see a flexing of factional muscles, and perhaps a few chairs being thrown.
• For the Rand...its immediate fortunes lay in the FEDs hands
• Good luck.