Risk Alert

They ask: what are the ideological drivers behind these and other policies?

Mahlobo and Cronje also return to the issue of terrorism in Mozambique, and the growing threat of Jihadism in the region.

Mahlobo and Cronje also look at the short, medium and longer-term prospects for global commodities, markets and the Dollar. 

Will the Biden administration’s ‘infrastructure’ plan deliver sustainable growth?  

Mahlobo and Cronje also look into the likelihood of a third wave of Covid-19 infections in South Africa.

With Parliament set to push through Expropriation legislation as well as amend the Constitution, what will the government do with its new powers?

Mahlobo and Cronje also lay out three scenarios for Jacob Zuma, following the Zondo Commission’s appeal to the Constitutional Court to jail him for contempt.

Internationally, Mahlobo and Cronje look at recent events in North Korea, Turkey, Israel, China and the United States.

What does this vote say about the balance of power within the ANC and the prospects for policy reform in the country?

Cronje and Mahlobo also dissect the ongoing delays to South Africa’s Covid-19 vaccination programme and whether this may increase the likelihood of a ‘third wave’ of infections.

Will the private sector move on vaccines amidst ongoing delays by the state, they ask?

Mahlobo and Cronje conclude by discussing the prospects for the US Dollar and the South African Rand.

Ongoing wage negotiations with public sector unions seem likely to undermine the Finance Minister’s plans to curtail spending, they argue. 

What do ongoing delays with South Africa’s Covid-19 vaccine rollout say about the relationship between private healthcare providers and the state, they ask?

The country’s low growth outlook will undermine prospects for any recovery in employment levels, while poor school outcomes continue to hinder labour absorption. 

Is the global economy entering a period of sustained recovery?

As the world emerges from the rubble of the Covid-19 crisis, Cronje and Mahlobo explore the drivers of the economic recovery.

What factors could derail the recovery, they ask?

Cronje and Mahlobo examine six key indicators to determine the policy and ideological orientation of the government.

These indicators reveal a policy framework increasingly hostile to investment and growth in the country.

What does the risk of SA falling behind the world in its vaccine response tell us about post-Covid economic recovery prospects?

Mahlobo and Cronje also warn that new stimulus measures in the United States may lead to future inflation risks.

Cronje and Mahlobo also warn of ‘hairline cracks’ that are beginning to emerge inside South Africa’s banking sector.

They conclude with an early take on China’s relationship with the United States in the Biden era.

Cronje and Mahlobo also explore the reasons for the declining competitiveness of SA's mining sector.

They conclude by highlighting some new (and old) risks in America’s politics. 

What does the re-definition of beaches under the latest Lockdown regulations say about the ideological leanings of the ruling party and the competence of the government itself, they ask?

Cronje and Mahlobo also highlight recent calls by the South African Communist Party (SACP) for the government to pursue a prescribed assets programme.

Cronje and Mahlobo also identify the key trends that will shape South Africa and the world in 2021.

Will SA return to hard lockdowns over the festive season, they ask?

Mahlobo and Babaya also look at the performance of the UK and Eurozone economies following the re-introduction of lockdown restrictions.

Are prescribed assets really off the table, or will ‘infrastructure bonds’ be used to plug the government’s expenditure gaps with private savings?

Cronje and Mahlobo also consider whether South Africa may see the reintroduction of hard lockdowns in the near future.

Do the police, army and intelligence services have the capacity to counter these multiple threats?

Cronje and Mahlobo also consider the short-term global risk equation going into 2021.

As organised business groups lobby for civil service job cuts, will austerity measures strengthen anti-reform and anti-business activists within the Tripartite Alliance?

Cronje and Mahlobo conclude by turning their attention to East Asia, where a new multilateral trade agreement promises to strengthen China’s hand in the region.

Does Mr Magashule’s arrest signal a shift in the ANC’s approach to corruption within the party or will it be business as usual?

Mainstream analyst and media opinion may have misread last week’s by-election results and what these signify for the status of the major parties.

Cronje and Mahlobo also review a number of global flashpoints including nuclear capabilities in Iran, the further capitulation of Hong Kong to Beijing, and tensions within Boris Johnson’s government over a UK-EU Brexit deal.

What is going on with Covid-19 in Europe and America and what does this mean for the global economy?

As a new era begins in America, how will markets and business react to the new balance of power?

In the absence of structural reform, what are the risks associated with the government’s current fiscal trajectory?

Cronje and Mahlobo also look abroad to renewed Covid-19 risks in Europe as well as this week’s election in America.

While Mr Biden still appears well ahead in the electoral college vote, several swing states could tip the balance in favour of Mr Trump.

On the domestic front, Cronje and Mahlobo look ahead to this week’s interim budget speech and present the CRA’s growth estimates for the medium term.

A slightly reworked Expropriation Bill opens the door to expropriation without compensation across various asset classes, including (but not limited to) land.

The IMF has revised its global growth estimates upwards, while India forges ahead with long-awaited reforms.

Is the power of trade unions in South Africa on the decline following last week's failed attempt at a national strike?

Will Joe Biden sustain his lead in the build-up to next month's US presidential election?

What is the risk of the growing unemployment problem to the ANC government and the country as a whole?

While some moves are being made to assuage public opinion on corruption in the ANC, Cronje and Mahlobo caution against being distracted by what they term ‘political rabbits.’

Cronje and Mahlobo also warn that fears of second wave Covid-19 infections in Europe might rattle markets and policy makers.

Who will emerge victorious in the US Presidential race?

Cronje and Mahlobo argue that these risks may be delayed, but not entirely removed.

Will there be peace and stability in the Middle East following the normalisation of various Arab countries’ ties with Israel?

Cronje and Mahlobo outline five ways in which ANC members implicated in corruption could avoid having to ‘step aside’ from their positions.

Although the global recovery continues, there are a variety of indicators that suggest the world is entering a more erratic recovery phase.

Will there be a more aggressive approach from President Ramaphosa in tackling corruption?

In lieu of prosecutions, can internal disciplinary processes succeed, given how widespread corruption is within the National Executive of the party?

These and other key questions are discussed against the backdrop of the ANC’s deep and persistent factional divisions.

Will South Africa's security be threatened by terrorism over the medium-term as a consequence?

Despite assurances of party leaders, the ANC remains committed to prescribed assets in South Africa, and we explore the ideological drivers behind this.

As belated attempts are made to reopen the economy, has South Africa really passed its peak, as we have confidently argued over the last two weeks?

Also assessed is the track record of Kamala Harris, the Democratic Party nominee for Vice President of the United States.

Dr Cronje also reveals the underlying reasons for the recent turning of public opinion against the ANC government.

Finally, Dr Cronje contemplates the veracity of 'Second Wave' fears, and the implications for the nascent global economic recovery.

The shrinking tax base and growing public expenditure heightens the possibility of the country falling into a debt trap, he says.

Dr Cronje also assesses the validity of the ‘Second Wave’ thesis and the consequences for the global economy.

On the international front, Dr Cronje assesses the purported ‘second wave’ of Covid-19 infections in the US and Europe, as well as the ongoing tit-for-tat posturing between the US and China.

Government plans to introduce a basic income grant to offset the social and economic impact of the lockdown will put even more pressure on the already strained fiscus. Government may make a move on private pensions to finance the grant programme, he argues.

Although the global economy appears to be bouncing back after Covid-19, Dr Cronje highlights four risks which may derail this recovery.

With manufacturing and trade volumes increasing across the developed world, we see the likelihood of South Africa de-coupling from the post-Covid-19 global recovery continuing to grow.

As GDP declined by 2% in Q1 2020, South Africa’s recession continued for the third consecutive quarter under President Cyril Ramaphosa. Further contractions of over 30% are expected in Q2 as a consequence of the government-imposed Lockdown.

This comes amidst signs of a robust post-Covid-19 global recovery driven by gradual re-opening in the developed world.

Capacity shortfalls at Eskom and a limited appetite for structural reform will put a hard cap on economic growth prospects going forward, he says.

On the international front, Dr Cronje discusses recent clashes on the border between China and India, as well as simmering tensions between North and South Korea.

Mahlobo also discusses the prospects for reform in South Africa’s electoral system, as well as recent polling which suggests high demand for deregulation of the labour market.

Internationally, Dr Cronje highlights how markets and employment numbers in the developed world are beginning to rebound despite enormous global geostrategic volatility.

On the international front, Dr Cronje notes that R remains below 1 for much of Europe, America, and Asia, signalling the early stages of a global recovery.

Beyond Covid-19, Dr Cronje highlights the restrictions on Hong Kong’s autonomy by Beijing, as well as growing Russian influence in Libya.

CRA calculations reveal that South Africa’s R rate remains above 1, suggesting that the pandemic is still expanding exponentially more than 60 days after the country recorded its 100th case.

Globally, Dr Cronje observes that the continued posturing between the USA and China will be tempered by both nations’ interdependent trade relationship.

Expect a stuttering economic re-opening in Europe and the UK if Covid-19 reproductive rates remain below 1.

Domestically, Dr Cronje highlights the recent statements made by President Ramaphosa in favour of “Radical Economic Transformation”  as well as the isolation of the Finance Minister within the cabinet.

Mahlobo notes that the reform faction of the ANC remains a minority, with the securocrats and ideologues controlling the balance of power.

Internationally, Mahlobo highlights the risk of South Africa’s foreign policy stances undermining longer term access to western funding.

Mahlobo notes that the weakness of South Africa’s stimulus position, combined with the flaws in the new lockdown model could see a major crisis in which public confidence in the government collapses just as the South African infection curve escalates and millions of people are forced to come to terms with deepening impoverishment.

On South Africa, Dr Cronje discusses the growing likelihood of increased stimulus spending and highlights the prospect of money-printing as a medium-term risk.

Dr Cronje also reflects on the risks attendant to a premature re-opening of South Africa’s schools, which, he argues, would undermine much of the effect of the lockdown to date.