BUSINESS DAY SPOTLIGHT
PODCAST | Economic news of the week: SAA and the coronavirus
The week’s top economics news from SAA’s bailout to how the coronavirus could affect SA’s economy
In this edition of Business Day Spotlight, we round up the week’s top economics news from one state-owned enterprise being bailed out, yet again, to how the coronavirus could affect SA’s economy.
Join the debate:
Our host Mudiwa Gavaza is joined by Jee-A van der Linde, an economist with NKC African Economics, to explore how these developments could affect SA.
The first part of the discussion focuses on national carrier SAA. Earlier this week, the Development Bank of Southern Africa (DBSA) gave R3.5bn in funding; the National Treasury had placed the airline in business rescue in December.
What does the financial bailout mean for the fiscus, where does it leave SAA and was it the right thing to do?
Van der Linde explores what the possible policy implications could be, particularly for future bailouts and how other SOEs are handled in future. Following on, he gives his thoughts as to the bailout’s effect on the national budget and how international ratings agencies will view this intervention by the government.
In the second half, the discussion shifts to the coronavirus, which has been spreading in China, with about 8,000 people infected so far, and has started to be found in other parts of the world. Given that China is one of SA’s biggest trading partners, Van der Linde says the rand took a hit this week due to developments around the virus. The outbreak has disrupted the flow of business in China, which had a knock-on effect on global financial markets, he says, though the full effect can only be assessed after some time has passed.
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