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LOCKDOWN LEGACY

By: Darlene Creamer 3rd April 2020 The economic effects of the 21-day lockdown are likely to be painful and long lasting. The monetary authorities have acted swiftly to increase liquidity, while the fiscal authorities have also made some initial accommodations and are likely to have to make even more. It’s premature to put a... →

ECONOMIC HEALTH WARNING

By: Darlene Creamer 27th March 2020 There is now little question that the world economy is heading for a recession in 2020 as governments, correctly, adopt extreme measures to ‘flatten the Covid-19 curve’ such that it does not seriously breach the capacity of their health systems. The real issue now is what actions can be taken to... →

GOING DESTRUCTIVELY VIRAL:

By: Darlene Creamer 20th March 2020 There were already some concerns at the start of 2020 that the global economy was showing signs of slowing. With the outbreak of the Covid-19 virus, however, the outlook has worsened considerably. Frontline sectors such as aviation and tourism are under extreme pressure, but it is becoming... →

FISCAL FIREFIGHT

By: Darlene Creamer 13th March 2020 There is little question that South Africa’s powerful public-sector unions are preparing for a showdown with government over the 2020 Budget, which contains wage-bill cuts of R160-billion over three years when compared with the baseline contained in the 2019 Budget. Cuts of R37.8-billion outlined... →

CEO WITH A FULL KITBAG:

By: Martin Creamer 6th March 2020 Incoming CEO Natascha Viljoen’s full kitbag of experience will stand her in good stead when she takes over the reins of Anglo American Platinum on April 16. One group mine that she is likely to find a pleasure to lead is the rich Mogalakwena platinum group metals mine. This mine gushes cash. Its... →

SERVED UP COLD

By: Darlene Creamer 28th February 2020 Finance Minister Tito Mboweni, who is known to moonlight as an amateur chef, lacked some critical elements when he delivered his 2020 Budget this week. Besides lacking the fiscal spice and electric power required to provide some much-needed economic heat, Mboweni was also not able to turn to his... →

BAD IDEA

By: Darlene Creamer 21st February 2020 While State-owned enterprises (SOEs) are crashing and burning all around us, Mineral Resources and Energy Minister Gwede Mantashe’s big hairy audacious goal for overcoming the failures of our largest SOE, Eskom, is . . . wait for it: to set up another power-generation SOE as a back-up to Eskom!... →

CARPET OR RUG?

By: Darlene Creamer 14th February 2020 Mineral Resources and Energy Minister Gwede Mantashe got pulses racing for the right and wrong reasons earlier this month. Firstly, he indicated that he was finally ready to roll-out the red carpet for self-generation projects by amending Schedule 2 of the Electricity Regulation Act to make it... →

NO WORKLOAD SHEDDING:

By: Terence Creamer 7th February 2020 There will be no honeymoon period for Eskom’s new CEO, Andre de Ruyter. South Africans are beyond frustrated at the poor performance of the State-owned power utility and irritated by the prospect of not only having their taxes used to bail-out the entity, but for such injections to be accompanied... →

DELICATE OPERATION

By: Darlene Creamer 31st January 2020 On February 26, all eyes will be on Finance Minister Tito Mboweni when he delivers the 2020 Budget. No doubt, National Treasury officials are working tirelessly and with surgical precision to ensure that the Budget operation (consolidation with the least pain possible) is not only a success, but... →

HIGH YIELD:

By: Martin Creamer 24th January 2020 Top of Anglo American’s mind in bidding for London-listed Sirius Minerals is planet earth’s need for greater crop yield from less farmland. Anglo sees an opportunity to achieve this by turning Sirius’ polyhalite project in the UK to positive account and then selling the multi-nutrient fertiliser... →

NO ESCAPE

By: Darlene Creamer 17th January 2020 The wreck of South Africa’s ‘lost decade’ looms large in the rear-view mirror as we enter the 2020s. The country’s ‘decade horribilis’ was characterised by load-shedding, which sapped confidence and undermined growth, gratuitous corruption, which ripped at the very fabric of society, and the... →

BITTER TASTE

By: Darlene Creamer 13th December 2019 In what is arguably the biggest corporate scandal since Steinhoff, several former Tongaat Hulett executives have been fingered in what appears to amount to accounting fraud. This “undesirable accounting” has been confirmed through a PwC forensic investigation, which is likely to result in the... →

CLOCK IS TICKING

By: Darlene Creamer 6th December 2019 There is growing frustration at the lack of progress in initiating bidding processes for the procurement of new electricity generation. Despite the fact that the Cabinet-endorsed Integrated Resource Plan 2019 (IRP 2019) outlines an urgent need for between 2 000 MW and 3 000 MW to address a gap... →

SUSTAINABILITY TAILSPIN

By: Darlene Creamer 29th November 2019 For two decades, possibly even longer, South African Airways’ (SAA’s) operational and financial sustainability has been highly questionable. Various turnaround strategies have been attempted but, in the end, it was always left to the taxpayer to foot the bill when these failed. That was a costly... →

SALDANHA SHUTDOWN

By: Darlene Creamer 22nd November 2019 ArcelorMittal South Africa announced this month that it would be placing the Saldhana Steel mill on care and maintenance. The decision was attributed to a steady erosion of the input cost advantages on which the facility was originally built. Saldanha, the company said, had incurred substantial... →

TIME FOR KICK-OFF

By: Darlene Creamer 15th November 2019 During 2019, South Africans arguably came to terms with the damage caused by State capture to the country’s economic playing field, as well as its key players. It became clear that repairing the pitch and revitalising our damaged economic muscle would take longer, and be more painful, than... →

WATER WORRIES

By: Darlene Creamer 8th November 2019 Following an extremely dry start to the rainy season in the north-eastern parts of the country and with ongoing drought conditions in other regions, concerns over water security are increasing. Human Settlements, Water and Sanitation Minister Lindiwe Sisulu has urged South Africans to urgently... →

INCONVENIENT TRUTH

By: Darlene Creamer 1st November 2019 The fact that South Africa has not procured any new electricity capacity from independent power producers since 2014 is biting. Despite absolutely no demand growth for a decade, the country is failing to keep the lights on largely because Eskom’s undermaintained coal fleet is unable to operate... →

WRESTLING OVER REVENUE

By: Darlene Creamer 25th October 2019 For years, Eskom has been unhappy with the way the Energy Regulator has been applying the methodology used for calculating the State-owned utility’s allowable revenue. This calculation is highly contested by various stakeholders, as it is used to determine Eskom’s tariff adjustments. For years,... →

ON THE MENU

By: Darlene Creamer 18th October 2019 Finance Minister Tito Mboweni will not have his staple Lucky Star pilchards available to add some much-needed flavour to what is likely to be a relatively foul-tasting Medium-Term Budget Policy Statement (MTBPS). The statement, which will be released on October 30, is likely to be dominated by... →

BACK TO THE FUTURE

By: Darlene Creamer 11th October 2019 After a short-lived profit reprieve in 2018, South Africa’s upstream steel industry is under severe financial pressure yet again. In fact, it’s looking more and more like “déjà vu all over again”, to steal Yogi Berra’s famously redundant quotation. South Africa’s largest producer ArcelorMittal... →

SINKING FEELING

By: Darlene Creamer 4th October 2019 For several years, the South African economy has been dragged down by politics and politicians. During the Jacob Zuma Presidency, corruption and State capture tore into the economy much like the proverbial iceberg that tore through the Titanic’s hull. Under President Cyril Ramaphosa the economic... →

PULLING THE RUG

By: Darlene Creamer 27th September 2019 With little or no prospect of cash-strapped Eskom being able to close the country’s emerging supply gap, South Africa’s reliance on independent power producers (IPPs) is undoubtedly going to rise further. Given that background, government’s plan to review the existing IPP contracts appears... →

GROWTH PUZZLE

By: Darlene Creamer 20th September 2019 Finance Minister Tito Mboweni has come in for some heavy criticism following the release, for public comment, of an economic strategy document. The howls of disapproval have also not been confined to the opposition benches, with members of the governing Tripartite Alliance showing as much... →

KNIFE EDGE

By: Darlene Creamer 13th September 2019 Slowly but surely the severity of South Africa’s fiscal situation is starting to sink in. The country is simply not expanding at a pace that is supportive of securing the revenue growth required to meet the ever-increasing demands on the public purse. The country’s debt is likewise reaching... →

MIND THE GAP

By: Darlene Creamer 6th September 2019 South Africa’s fiscal balance has entered dangerous territory, owing to a combination of years of low growth, under collection of revenue by an institutionally weakened South African Revenue Service, corruption and State capture and large new demands, especially from State-owned companies such as... →

RAND RUCTIONS

By: Darlene Creamer 30th August 2019 South Africans have become somewhat accustomed to the fact that their currency is among the most volatile globally. For that reason, many citizens keep close tabs on the dollar/rand exchange rate, in particular. When it weakens, the mood darkens; when it strengthens, South Africans eagerly await... →

HEALTH WARNING

By: Darlene Creamer 23rd August 2019 There is no question that South Africa’s current health system is failing to meet the needs of its citizens, especially those who do not have the means to access private healthcare. There is also little question that the drafters of the National Health Insurance Bill have the best of intentions.... →

TIME & MONEY

By: Darlene Creamer 16th August 2019 Government’s commitment to transfer a further R59-billion to Eskom during the 2019/20 and 2020/21 financial years has bought the State-owned utility some time. By its own estimation, the transfers will guarantee Eskom’s going-concern status by a further 12 to 18 months. Eskom has also warned,... →

TIGHT SPOT

By: Darlene Creamer 9th August 2019 In a note explaining its revision of South Africa’s credit outlook from stable to negative, Fitch Ratings said the decision reflected a marked widening in the Budget deficit as a result of lower growth and increased spending, including higher spending to support State-owned enterprises. In other... →

WRECKING BALL

By: Darlene Creamer 2nd August 2019 The Constitutional Court’s scathing judgment when upholding a North Gauteng High Court ruling that Public Protector Busisiwe Mkhwebane’s pay 15% of the South African Reserve Bank’s legal fees in the Absa/Bankorp review case said it all. Mkhwebane was found to have acted in bad faith and... →

TRUMP CARDS

By: Darlene Creamer 26th July 2019 Compared with his ‘Stalingrad Defence’ of old, the legal strategy adopted by former President Jacob Zuma during his recent appearance before the Commission of Inquiry into State Capture was far less clear. Nevertheless, Zuma was still able to play some of his well-worn trump cards, including his... →

DIRTY DEEDS

By: Darlene Creamer 19th July 2019 The credibility of the Office of the Public Protector rose dramatically during Thuli Madonsela’s tenure. Sadly, it is being severely undermined by her successor, Busisiwe Mkhwebane. Already several of Mkhwebane’s reports have been found wanting, while her approach to the so-called South African... →

INTENSIVE CARE

By: Darlene Creamer 12th July 2019 Conditions in South Africa’s manufacturing sector remain more than challenging. The seasonally adjusted Purchasing Managers’ Index (PMI) increased marginally in June to 46.2 points, but the average level for the second quarter remained below the 50-point threshold that separates comtraction from... →

STUMPED

By: Darlene Creamer 5th July 2019 With South Africans still were licking their wounds after a dismal Proteas batting performance at the Cricket World Cup, Eskom financial problems rose again like a hostile bouncer from England’s young pace bowler Jofra Archer. While a R230-billion, ten-year injection have been confirmed by the... →

TIME TO FALL

By: Darlene Creamer 28th June 2019 The unsavoury and depressing revelations at the Commission of Inquiry into State Capture continue to flow. All the large State-owned companies – Eskom, Transnet and South African Airways – have made their representations and their confessions, while the Bosasa disclosures offered insight into the... →

POLICY TUG OF WAR

By: Darlene Creamer 21st June 2019 The battle, within the African National Congress, for control over the direction of economic policy has always been a highly contested one. In recent years, however, it has escalated to the status of civil war. Given the disastrous state of the economy and the desperate need for an investment-led... →

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