SA slips into recession
3 March 2020 - Listen to the CRA's David Ansara and Ian Cruickshanks discuss the implications of slow growth in this audio note.
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- StatsSA data reveals that real GDP decreased by 1.4% (Q/Q) in Q4 2019, following a decrease of *0.8% (Q/Q) in Q3 2019.
- Two consecutive quarters of negative economic growth means SA has slipped into a technical recession.
- Annual GDP growth for 2019 now stands at 0.3%, down from 0.8% in 2018.
Preview of Budget 2020
21 Feb 2020 - Minister of Finance, Tito Mboweni has very little room to manoeuvre ahead of his budget speech on Wednesday 26 February.
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In this client note, we highlight how growing deficits and government debt are likely to remain a feature of SA’s public finances into the future.
CRA calculations reveal that Treasury revenue and expenditure projections are historically inaccurate, with under-collections and overspending the norm.
US warns SA over EWC
The US Secretary of State, Mike Pompeo, has criticised the SA government's proposed policy of Expropriation Without Compensation (EWC).
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In the attached client note, we provide context on these recent remarks and detail how the US-SA commercial and diplomatic relationship is under significant strain.
We note that the ANC’s commitment to EWC may jeopardise SA’s participation in the African Growth and Opportunity Act (AGOA).
Please be in touch with us should you wish to discuss this development in more detail.
SONA 2020: Disrupted Nation
President Cyril Ramaphosa’s 2020 State of the Nation Address (SONA) was big on social compacts and consensus, but small on substantive policy reforms.
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In the attached note, we discuss how persistent energy shortfalls have forced the government into procuring additional electricity from independent power producers (IPPs). We also explore SOE financing, state capture, and the youth unemployment crisis.
Please be in touch with us should you wish to discuss the SONA in more detail.
ANC proposal: EWC decisions to be made by the executive, not the courts
The ANC has proposed that the executive, rather than the courts, should decide when nil compensation on expropriation should apply.
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This contradicts language proposed by the Ad Hoc Committee in parliament to amend section 25 of the Constitution.
In the attached note, we explore the implications of this new proposal.
EWC is a rapidly evolving risk with several dimensions. As a client of the CRA, I would encourage you to arrange an off-the-record meeting with us to discuss this risk in private.
Update on Expropriation Without Compensation (EWC)
Legislation to amend section 25 of the Constitution is currently open for public comment until 31 January 2020. This unprecedented change to the Bill of Rights will significantly weaken property rights and further damage economic growth.
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In the attached note, we explore the wider implications of expropriation without compensation (EWC), the latest developments and attendant risks.
Although this note aims to provide a broad overview of recent developments, we would encourage clients to meet with us for a comprehensive discussion on the drivers of EWC and the potential risks for your business.
Contact Sherwin van Blerk to set up a meeting: sherwin@cra-sa.com