Risk Alert

Risk Alert (Week of 25 May 2020)

Risk Alert (Week of 25 May 2020)

Following President Ramaphosa’s announcement last night, Dr Frans Cronje argues that support for the economic lockdown has largely collapsed within the government and that the move to level-3 will see a significant degree of economic reopening.
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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.

Risk Alert (Week of 18 May 2020)

Risk Alert (Week of 18 May 2020)

This week, Dr Frans Cronje, argues that South Africa’s purported move to Lockdown Level 3 remains vague, with no clear benchmarks attached to the various levels, and no plan in place to manage the transition.
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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.

Risk Alert (Week of 11 May 2020)

Risk Alert (Week of 11 May 2020)

This week, Dr Frans Cronje considers tensions between the United States and China, and the prospects for both economies in a post-Covid-19 global recovery.
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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.

Risk Alert (Week of 4 May 2020)

Risk Alert (Week of 4 May 2020)

This week, Bheki Mahlobo argues that the move from Stage 5 to Stage 4 lockdown represents a political response to public frustration at the lockdown, rather than a substantive change in policy.
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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.

Risk Alert (Week of 27 April)

Risk Alert (Week of 27 April)

CRA Research Assistant, Bheki Mahlobo argues that this week’s expected move from phase 5 to phase 4 of the South African lockdown may do relatively little to restore much by way of domestic economic activity.
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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.

Risk Alert (Week of 20 April)

Risk Alert (Week of 20 April)

This week, Dr Frans Cronje considers the proposal by the European Commission to reopen the economies of Europe, and contrasts this with the recent tightening of restrictions in Japan.
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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.

Risk Alert (Week of 13 April 2020)

Risk Alert (Week of 13 April 2020)

This week, Dr Frans Cronje identifies the ideological and political contestation within the Tripartite Alliance as a major risk complicating South Africa’s response to the Covid-19 crisis and the recovery thereafter.
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Dr Cronje also provides projections of Covid-19 mortality estimates based on various case fatality rates (from 0.5% on the lower end to 2% on the top end). He argues that without much improved levels of testing, analysts and policy makers alike are effectively driving blind in their response to the pandemic.

Risk Alert (Week of 6 April 2020)

Risk Alert (Week of 6 April 2020)

This week, Dr Frans Cronje argues that despite the economic and market disruption, the worst case global scenarios for Covid-19 might be dissipating.
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While there may be relative upsides beginning to emerge internationally, Dr Cronje’s assessment of South Africa’s recovery prospects are more downbeat as isolation protocols falter and the economic impact of the lockdown begin to be felt.

Risk Alert (Week of 30 March)

Risk Alert (Week of 30 March)

In this week’s alert, Dr Frans Cronje warns that the SA response to the Covid-19 pandemic may not be as effective as in other countries, especially as poorer communities struggle to adhere to isolation protocols.
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Dr Cronje also looks beyond the current crisis to assess SA’s economic outlook post-Covid-19. Last week’s Moody’s downgrade will hinder recovery efforts, and will likely result in further ZAR weakening.

Risk Alert (Week of 23 March 2020)

Risk Alert (Week of 23 March 2020)

This week, Dr Frans Cronje assesses the SA government's capacity to respond to the rapidly unfolding Covid-19 crisis.
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Dr Cronje also discusses the volatility in international financial markets, the efficacy of stimulus measures, as well as prospects for the domestic and global economy in 2020.

Risk Alert (Week of 16 March 2020)

Risk Alert (Week of 16 March 2020)

After the tumultuous events of last week, Dr Frans Cronje unpacks the ongoing fallout from the COVID-19 crisis and the consequent shocks in global financial markets.
Risk Alert (Week of 9 March 2020)

Risk Alert (Week of 9 March 2020)

This week, Dr Frans Cronje discusses the US general elections, and the impact of the coronavirus outbreak on Chinese manufacturing output.
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On the domestic front, Dr Cronje assesses the Finance Minister's prospects of reducing the public sector wage bill. Dr Cronje also highlights the risk of prescribed assets and the growing pressure on the SARB to loosen interest rates.

For queries on these or other points, please contact Bheki Mahlobo, who assisted Dr Cronje with the production of this alert.

Risk Alert (Week of 2 March 2020)

Risk Alert (Week of 2 March 2020)

In his Risk Alert for the week of 2nd March, Dr Frans Cronje analyses three risks emerging out of last week’s Budget speech. Dr Cronje also assesses the uncertainty surrounding the global coronavirus outbreak, as well as the causes of the recent strengthening of the US dollar.
Risk Alert (Week of 24 Feb 2020)

Risk Alert (Week of 24 Feb 2020)

This week, CRA Director, Dr Frans Cronje discusses trends in the global economy and likely consequences for SA.
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International factors include a dramatic slowdown in GDP growth in Japan, and the latest forward guidance by the US Federal Reserve, which indicated that it remains opposed to further rate cuts.

Two international bodies also made pronouncements on SA last week: Moody’s cut SA’s growth outlook from 1.5% to 0.7%; and the IMF, whose chief economist visited the country, dismissed the likelihood of a bailout for SA.

On the domestic political front, Dr Cronje discusses the origins of the Employment Equity Amendment Bill of 2020 and its likely impact.

Risk Alert (Week of 17 Feb 2020)

Risk Alert (Week of 17 Feb 2020)

This week’s Risk Alert highlights the risks associated with the United States’ ongoing review of its trade relationship with South Africa.
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Dr Frans Cronje argues that last week’s State of the Nation Address (SONA) failed to put forward a coherent plan to deal with SA’s deep economic problems. 

Two such problems include SA’s stubbornly high unemployment and lower manufacturing production output, both of which are discussed here in some detail.

Risk Alert (Week of 10 Feb 2020)

Risk Alert (Week of 10 Feb 2020)

This week’s Risk Alert focuses on the ongoing electricity supply shortfall, and the resulting constraints on SA’s economic growth.
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The proposed break-up of Eskom into multiple parts has been welcomed by many commentators. However, this could precipitate a second wave of state capture.

The global Coronavirus outbreak presents a contagion risk for SA and is something to watch closely.

Risk Alert (Week of 3 Feb 2020)

Risk Alert (Week of 3 Feb 2020)

The CRA has launched a weekly Risk Alert service. In this first alert, CRA Director, Frans Cronje, discusses Mr Ramaphosa’s current vulnerability, the prospects for reform in the ANC and the significance of the recent bailout of SAA.