Today’s edition
Double Dose
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Good morning, and welcome to your Friday Roundup. If you thought your medical aid was already expensive, the first increases proposed for next year are almost double what the regulator recommended. MTN, meanwhile, wants to spend billions buying the company it currently pays rent to. And your salary might be going up, but what it can actually buy looks to be going backwards. Let’s get into it.
MARKETS
ASKING PRICE
Momentum and Medshield want 7.9% more from members next year, about double what the regulator asked for
For a lot of South Africans, medical aid is already one of the biggest bills that comes off every month. But schemes can’t simply decide what they want to charge you. Every increase needs approval from the Council for Medical Schemes before it reaches your debit order. For 2027, the council has asked schemes to keep increases to 3.8%, in line with the Reserve Bank’s inflation forecast.
This week the first prices came in, and they’re pretty far off that recommendation. Momentum and Medshield both want 7.9% more from members next year, while Bestmed wants 7.35%. That’s about double what the regulator asked for, and it raises the obvious question: why are the two numbers so far apart?
Where the extra comes from:
- For 2026, schemes expected specialist costs to rise 8.61% and hospital costs 8.51%, more than double the council’s benchmark.
- The Board of Healthcare Funders says hospitals and specialists largely set those prices, leaving schemes, and ultimately their members, to pay the bill.
- Schemes anyone can join shrank 3% between 2019 and 2024 while their average member age rose to 37, and every young member who leaves makes cover more expensive for those who stay.
None of the 2027 prices is final until the council signs it off, and anything above 3.8% has to arrive with a business plan explaining why.
RENT TO OWN
The company MTN pays to use its old cell towers could soon belong to MTN
In 2021 MTN’s South African business sold 5,713 tower sites to IHS Towers for R6.4 billion and signed a lease to keep using them. Since then the rent has flowed one way, and there is a lot of it: MTN is IHS’s biggest tenant by a distance, making up about 70% of its revenue.
Now MTN wants to take back control. In February IHS’s board accepted its offer of $8.50 a share for the roughly three-quarters of the company it does not already own, about $2.2 billion. But MTN doesn’t need to find that entire amount itself: about $1.1 billion will come from cash that IHS already has sitting on its balance sheet, with MTN funding the rest through its own cash and borrowing.
Owning IHS outright turns that rent into money moving from one MTN pocket to another, which is why chief executive Ralph Mupita calls the deal a chance to buy back MTN’s towers. It would also make MTN the landlord to its rivals, who rent space on the same towers. On Wednesday the Competition Commission recommended that the Competition Tribunal approve the deal, with conditions aimed squarely at that: fair access for every network, fair renewal of existing leases, and no customer treated worse than MTN South Africa.
BAGEL BITE
Which of these rocks can float on water?
A. Granite
B. Limestone
C. Pumice
DOING THE ROUNDS
Woolworths CEO Sam Ngumeni has about 5 years to earn a share award that was worth R51 million when it was granted in March. That’s also roughly how long he has until retirement. Half of the award depends on Woolworths’ share price: it needs to reach R80 by June 2031 for that portion to start paying out, and R100 for him to get it in full. Right now, the shares are trading at about R37, after losing roughly half their value in 3 years. Full story →
The Gautrain is about to get its biggest upgrade in years. Its fleet will grow from 24 to 32 trains, services are expected to run more frequently and for longer hours, and the 8 new trains will be built right here in Gauteng. It all comes with a new 15-year operating deal awarded to Sihamba Sonke Mobility, a group made up mostly of South African companies. Full story →
South African businesses seem to be feeling a little less nervous. North-West University’s measure of policy uncertainty fell sharply in the 3rd quarter, from 81.9 to 61.3. Anything above 50 still signals unusually high uncertainty, but the university thinks businesses are starting to adjust to the oil shock caused by the US-Iran war. In its words, South Africa’s economic momentum has been “interrupted, not derailed”. The next big tests are October’s medium-term budget and November’s municipal election. Full story →
South Africans are taking home slightly more money than a year ago, but unfortunately, it doesn’t go as far. The average take-home salary was about R21,600 in August, up 1.9% from last year. But because prices have risen faster than salaries, that money can actually buy 2.6% less. And it could get worse before it gets better. PayInc expects the Middle East conflict to push inflation above 5% in October, putting even more pressure on what we can afford. Full story →
WEATHER
BAGEL GAMES
Have you got what it takes to win today’s Wordle? Play here →
THE ANSWER
As for the Bagel Bite, the answer is: C. Pumice
It forms when frothy, gas-filled lava cools so quickly that the bubbles are trapped inside as it hardens. All those hollow spaces make pumice light enough to float until it slowly becomes waterlogged. After some eruptions, huge rafts of floating pumice can drift across the ocean for months. It is also the gritty rock often used to scrub away dead skin.
That’s your Friday done, and the week with it. Enjoyed it? Forward it on, a friend can subscribe in a click. Written by the Business Bagel crew.