wThis week there were further developments in Trump Land regarding Paul Manafort, the trade war, and the denuclearisation of North Korea. It seems as though Eskom was riddled with corruption and will need a great deal of nurturing before it becomes a viable entity.
Global News
- House Democrats began their sweeping investigation of President Donald Trump’scampaign, businesses, transition and administration. Eighty-one people from Trump’s orbit have been asked to provide documents.
- Paul Manafort, Trump’s ex-right-hand-man, was sentenced this week to almost four years in prison. Manafort was convicted of fraud and hiding millions of dollars offshore. He has another trial date on 13 March on charges related to witness tampering.
- Some economists are saying that the ongoing trade war between China and the USmay cause permanent damage to the global economy – meaning that any rebound from a deal would not lead to a full recovery.
- The US trade deficit under the Trump Presidency will have worsened by over $100billion. Trump himself has used the deficit as his own benchmark for whether countries are “winning” or “losing”.
- After a summit with America collapsed, North Korea has reportedly restarted work on a site that can produce intercontinental ballistic missiles. Trump said that if this is the case, he is “a little disappointed.”
- President Vladimir Putin is considering legislation that would allow the government to censor the internet.
- Due to global policy uncertainty, trade tensions, and erosion of business and consumer confidence, the Organisation for Economic Co-Operation & Development (OECD) has revised its global growth forecast lower for 2019 and 2020 by 0.2ppt and 0.1ppt to 3.3% and 3.4%, respectively.
Local News
- Cyril Ramaphosa announced that the South African Reserve Bank (SARB) would be nationalised. He said, “We have a situation where we have external shareholders who live in various countries in the world. SA is one of only six countries in the world that still has shareholding in their central banks.” Although there is no intention to change the mandate of the SARB, the rand reacted negatively and has weakened by 2% against the dollar this week.
- The South African Reserve Bank reported that the current account deficit narrowedfrom 3.7% in the third quarter of 2018 to 2.2% in the fourth quarter of 2018.
- South Africa’s GDP growth rose in the fourth quarter of 2018 by 1.4% quarter-on-quarter. This brings 2018’s total increase to 0.8% year-on-year, down from 1.4% year-on-year in 2017.
- The National Energy Regulator of South Africa (Nersa) announced its decision on Eskom’s tariff application. Eskom had originally applied for tariff increases of 17.1%, 15.4% and 15.5% for FY20, FY21 and FY22, respectively. However, the parastatal received far less from Nersa at, 9.4%, 8.1% and 5.2%, respectively. Local power providers like Johannesburg’s City Power will now decide what increment they will pass on to consumers.
- For South Africa, the OECD expects growth to average 1.7% and 2.0% in 2019 and 2020. The main risks to the South African economy are electricity disruptions, flat domestic demand, and slowing growth.
- The SACCI Business Confidence Index has continued on a downward trend since September last year, declining to 93.4 points in February from 95.1 the month before. The dreary attitude is due to policy and political uncertainty ahead of the elections in May.
Source: Dynasty, Stanlib, Prescient, Daily Maverick, Moneyweb, Reuters, RMB, Aljazeera, and Bloomberg Markets, etc
