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South African Airways CEO resigns citing “uncertainty”1 minute read

The state-owned airline has not turned a profit since 2011

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South African Airways (SAA) Chief Executive Officer Vuyani Jarana has resigned due to what he said was the lack of progress on a strategy to turn around the loss-making airline, Fin24 financial news website reported on Sunday.

The state-owned airline has not turned a profit since 2011.

Citing Jarana’s resignation letter to SAA board chairperson Johannes “JB” Magwaza, Fin24 said the CEO cited uncertainty about funding and how slow decision making processes were delaying the airline’s turnaround strategy.

“The strategy is being systematically undermined, and as the Group Chief Executive Officer, I can no longer be able to assure the board and the public that the LTTS (long term turnaround strategy) is achievable,” he was quoted saying in the letter.

SAA spokesman Tlali Tlali neither confirmed nor denied the report but said the airline board would issue a statement shortly.

Jarana, a former executive at telecoms company Vodacom, was appointed in 2017 to implement a strategy intended to help the airline return to profit and wean it off government bailouts.

SAA, which has not made a profit since 2011, has drawn up a five-year turnaround plan that includes slashing costs and cancelling unprofitable routes as it grapples with cost increases that far outstrip revenue growth.

Jarana said in April that the airline has reached an agreement in principle with lenders to roll over 9.2 billion rand ($631.00 million) of debt.

His resignation comes more than a week after struggling state-owned power utility Eskom said its CEO, Phakamani Hadebe, was stepping down for health reasons after leading efforts to stabilise the highly indebted state firm.

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Ethiopia to divest 40% of Ethio Telecom

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The Ethiopian government is finalizing plans to sell a 40 percent stake in Ethio Telecom- the country’s sole telecommunication provider . The plan was announced by Ethiopia’s State Minister of Finance, Eyob Tekalign Tolina.

Ethiopia’s telecommunication industry is considered one of the last closed markets. It has been one of the government’s plans to liberalize the country’s economy launched by Prime Minister Abiy Ahmed. Ethio Telecom has a large market serving a population of around 110 million.

The government will retain ownership of the remaining 60 percent.

Foreign firms in the telecom sector will be invited to bid and a percentage of the minority stake will be sold to Ethiopian citizens. South Africa’s MTN and Kenya’s Safaricom have shown interest in expanding into Ethiopia in the past.

Ethiopia’s communications regulator says the country would proceed with the privatisation of the telecommunications sector despite the novel coronavirus outbreak.

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Zambia’s Zesco, Chinese firm enter $548 man deal

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Zesco Limited, Zambia’s state-owned electricity company, has signed contracts worth $548 million with Power China to develop three solar power plants that will add 600 megawatts (MW) to the national grid.

The three contracts are a step towards diversifying renewable energy for the country, which relies heavily on hydropower and has faced electricity shortages partly due to droughts.

“The three-grid solar PV projects will have a capacity of 200 MW each,” Zesco Managing Director, Victor Mundende said in the statement, adding that the power plants will boost access to electricity and enhance industrial development. A generating date is yet to be disclosed.

Zambia’s power supply deficit has grown by nearly 20% since September, State power utility, Zesco announced in March, despite hefty price hikes and the government’s fast-tracking of support for green energy projects. 

Zesco’s Director of Corporate Services Patrick Mwila said in March the electricity deficit had grown to 810 megawatts (MW) from a 690 MW gap in September last year. E

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Algeria to invest $3 billion in solar power, free up gas export

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The Coronavirus pandemic is proving to be the motivator for more economic diversification. An example of this, is Algeria’s plan to invest further in renewable energy and generate more electricity. The country intends to invest at least $3 billion dollars in this endeavor.

These new photovoltaic solar plants will generate a combined production capacity of 4000 mega watts (MW). The electricity will be consumed locally and excesses sold. The move will enable more gas to be sold externally.

Recently, Algeria lost its main gas supply destination due to cheaper alternatives with more supplies.

Currently, gas is used in generating about 98% of total electricity production in Algeria. But recent development has been encouraging Algiers to increase its exports of gas and crude oil, which are the main sources of Algeria’s revenue. Solar generated electricity makes up the remaining 2%.

Algeria’s Prime Minister, Abdelaziz Djerrad’s office announced the development on its website following a meeting of the government.

“In addition to meeting national demand for energy and preserving our fossil resources, this project will allow us to position ourselves on the international market,” it said in a statement.

It gave no details on where the electricity might be sold abroad or how much the proposed plants would contribute to domestic supply.

The COVID-19 pandemic and subsequent global movement restriction has influenced the drastic drop in crude oil and gas sales affecting countries like Algeria. The past two weeks has seen a gradual rise in price but Algeria like many other OPEC members have announced plans to seek foreign loans in 2020 for the first time in years to fund what they called “strategic projects”.

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