Weekly Risk Brief: Record Heat, Contested Ballots (Week 42, 2026)
Steyn Mc Dowall · 19 October 2026
Record El Niño temperatures and the 4 November municipal vote meet institutions under strain, as wildlife disease, local power failures and rising input costs shape the outlook for South African businesses.
Each risk is classified by severity, reach and onset, with its direction of travel and risk transfer position.
The view ahead
Two clocks are running: the vote on 4 November and an El Niño that has just set a temperature record. Neither can be moved, and both land on institutions that are already short of capacity.
The Constitutional Court ordered the electoral commission to add 181 ANC candidates to ballots in six municipalities while the ballots were already being printed, and the bill meant to regulate hung councils will not pass until after the vote. Killings linked to politics have already passed the full-year totals for the last two elections: 43 people were killed in 45 suspected attacks in the first nine months of 2026, against 30 in all of 2021 and 33 in all of 2024. In the Pacific, sea surface temperatures in the El Niño monitoring zone reached 29.70 degrees Celsius in September, above the peaks of 1982/83, 1997/98 and 2015/16. Foot-and-mouth disease has now been confirmed in kudu at Addo Elephant National Park, and manufacturing output fell 4.3 percent year on year in August as fuel costs fed through.
We expect the election period to bring litigation over lists and results, attacks on candidates and officials in contested wards and unstable coalitions afterwards, because the framework for them is not in place. We expect the weather to set the cost of food and farm inputs for 2027 more than the current surplus does, and we expect disease in wildlife to make livestock movement controls harder to lift. The effects that reach clients first are quieter ones: a fourth substation fire in Johannesburg's inner city since September, a medicine price increase that arrived after medical schemes had set their budgets, and a Road Accident Fund that the Transport Minister says will get no extra money.
Risks at a glance
Severity is how hard the risk lands. Reach is how far it travels: contained to one sector, connected across several, or systemic across the economy. Onset is how soon it arrives: immediate, building over coming months, or long-range. Nothing this week is rated severe.
| Risk | Severity | Reach | Onset | Direction |
|---|---|---|---|---|
| AGR-01Foot-and-mouth disease reaches wildlife in the Eastern Cape | Major | Connected | Immediate | Rising |
| CLI-01El Niño and the 2027 food price path | Major | Systemic | Building | Rising |
| MAC-01Fuel and imported-inflation shock | Major | Systemic | Immediate | Rising |
| ECO-03Illicit trade in cigarettes and medicines | Moderate | Connected | Immediate | Rising |
| ENE-02Johannesburg distribution network failure | Moderate | Connected | Immediate | Rising |
| POL-01Local government elections on 4 November | Moderate | Connected | Immediate | Rising |
| POL-03Attacks on candidates and party officials | Moderate | Connected | Immediate | Rising |
| REG-02Escalation in eastern DRC | Moderate | Connected | Building | Rising |
| GOV-03Criminal infiltration of police and prosecution | Moderate | Systemic | Building | Stable |
| GOV-05Anti-immigrant unrest and the asylum ruling | Moderate | Connected | Immediate | Stable |
| GOV-08Road Accident Fund funding stress | Moderate | Connected | Building | Stable |
| HLT-06Medicine price increase and scheme contributions | Moderate | Connected | Building | Stable |
| ECO-02Hunger and social licence | Minor | Systemic | Long-range | Stable |
| HLT-07National laboratory service governance failure | Minor | Contained | Building | Stable |
| REG-03Unrest in Mauritius | Minor | Contained | Immediate | Stable |
Dates that will move the picture
- 29 Oct
- Panel of judges hears government's bid for court supervision of the asylum rulingGOV-05
- 4 Nov
- Local government electionsPOL-01
- 9 Nov
- Madlanga Commission public hearings resumeGOV-03
- End 2026
- British American Tobacco South Africa closes its Heidelberg factoryECO-03
- Summer 2026/27
- El Niño planting window for the summer grain and oilseed cropCLI-01
- 2027
- Medical scheme contributions absorb an estimated R1 billion medicine cost increaseHLT-06
Opportunities worth watching
Energy storage build-out. Eskom is seeking a strategic partner for the 1.5GW Tubatse pumped-storage scheme, and government has prioritised 4 600MW of battery storage and 5 000MW of gas-to-power capacity under its integrated resource plan.
Deeper African capital markets. Twenty-one of the 29 countries in the 2026 Africa Financial Markets Index improved their scores on easing inflation, stronger reserves and regulatory reform, although thin trading still limits investment.
Steady growth outlook. The IMF has held its 2026 forecast for South Africa at 1 percent and raised its sub-Saharan Africa forecast to 4.5 percent, with gradual improvement expected over the medium term.
Risk register
Each card carries the risk, its category, severity, reach, onset, direction of travel and risk transfer position, together with the response we recommend.
- Insurable
- Three blocks. Cover readily placed in the local market.
- Partially insurable
- Two blocks. Cover available for part of the exposure, locally or internationally, with material exclusions.
- Not insurable
- One block. No insurance market responds. The exposure is managed, hedged or retained.
AGR-01
Foot-and-mouth disease reaches wildlife in the Eastern Cape
- Category
- Agriculture
- Severity
- Major
- Reach
- Connected
- Onset
- Immediate
- Direction
- Rising
- Insurance
- Partially insurable
Foot-and-mouth disease has been confirmed in kudu at Addo Elephant National Park after initial tests were negative and surveillance found rising lameness. SANParks is coordinating precautions with neighbouring landowners and livestock producers, and tourism remains open under veterinary conditions. Infection in wildlife is harder to contain than infection in a herd, and it follows the first outbreak in Namibia in 60 years.
What we recommend
Confirm biosecurity and movement-control compliance across Eastern Cape livestock and feed chains. Re-check export certification assumptions for any route touching the affected area.
CLI-01
El Niño and the 2027 food price path
- Category
- Climate
- Severity
- Major
- Reach
- Systemic
- Onset
- Building
- Direction
- Rising
- Insurance
- Partially insurable
Sea surface temperatures in the Nino3.4 zone reached an all-time high of 29.70 degrees Celsius in September, above the peaks of the 1982/83, 1997/98 and 2015/16 events, according to the EU's climate monitor. South African food inflation stands at only 1.1 percent after a record crop, but that cushion belongs to last season. The 2026/27 planting window now faces an exceptionally strong event.
What we recommend
Stress-test input costs, crop volumes and food-linked pricing against a poor summer, not against current inflation. Agree drought trigger points now, while cover and contracting options are still open.
MAC-01
Fuel and imported-inflation shock
- Category
- Macro and energy
- Severity
- Major
- Reach
- Systemic
- Onset
- Immediate
- Direction
- Rising
- Insurance
- Not insurable
Manufacturing output fell 4.3 percent year on year in August, pulled down by petroleum, motor vehicles, wood, food and beverages, and basic iron and steel. The sector has weakened since April, with only July as a break, as producers absorb the fuel price increases that followed the US war against Iran. Factory production is about 12 percent of GDP and is expected to restrain third-quarter growth after a 0.2 percent contraction in the second.
What we recommend
Reprice transport-linked and energy-intensive contracts now, and add fuel escalation clauses where they are missing. Test margins against a further increase before year end.
ECO-03
Illicit trade in cigarettes and medicines
- Category
- Economy
- Severity
- Moderate
- Reach
- Connected
- Onset
- Immediate
- Direction
- Rising
- Insurance
- Not insurable
An Ipsos study commissioned by BATSA puts the illicit share of the cigarette market at almost 75 percent in 2026, from 27 percent in 2022, with estimated annual tax losses of R30 billion, and the company will close its Heidelberg factory by the end of the year. The pharmaceutical industry says police have not acted on evidence of illegal medicine sales, including an unregistered experimental obesity drug. These are the industry's own findings.
What we recommend
Audit distributors and retail channels for diverted or unregistered product, and document evidence in a form authorities can act on. Test pricing against a market in which illegal supply sets the floor.
ENE-02
Johannesburg distribution network failure
- Category
- Energy
- Severity
- Moderate
- Reach
- Connected
- Onset
- Immediate
- Direction
- Rising
- Insurance
- Partially insurable
A fire at City Power's central substation in Marshalltown left parts of the inner city without power on Tuesday night, the fourth such incident since September, with no restoration time confirmed. City Power suspects vandalism or cable theft, and a community policing forum chair believes sabotage may be involved. Businesses carry the cost of outages in lost trade, extra spending and unrecovered rent.
What we recommend
Treat local distribution failure, not national load shedding, as the live continuity scenario for Johannesburg operations and test backup power accordingly. Confirm utilities extension wording, waiting periods and malicious damage cover.
POL-01
Local government elections on 4 November
- Category
- Political
- Severity
- Moderate
- Reach
- Connected
- Onset
- Immediate
- Direction
- Rising
- Insurance
- Partially insurable
The Constitutional Court overturned the Electoral Court and ordered the electoral commission to add 181 ANC candidates to ballots in six municipalities in the Eastern Cape, KwaZulu-Natal and Mangaung, with printing already under way. Relief applies only to the ANC, because 2 093 candidates from 44 other parties did not challenge their exclusion. The bill to regulate hung councils will not pass until after the vote.
What we recommend
Plan for litigation over lists and results, and for unstable coalitions in the affected municipalities after 4 November. Prepare service disruption and restricted movement scenarios for voting day.
POL-03
Attacks on candidates and party officials
- Category
- Political
- Severity
- Moderate
- Reach
- Connected
- Onset
- Immediate
- Direction
- Rising
- Insurance
- Partially insurable
At least 43 people were killed in 45 suspected political attacks in the first nine months of 2026, more than the 30 recorded in all of 2021, the year of the last municipal elections, and the 33 in all of 2024, according to the Global Initiative Against Transnational Organised Crime. Targets include ward councillors, party officials and traditional leaders. Two ANC members were shot dead and three wounded while campaigning door to door near Durban.
What we recommend
Review duty-of-care arrangements for staff and sites in contested wards, particularly in KwaZulu-Natal. Brief staff on avoiding campaign events and on reporting threats.
REG-02
Escalation in eastern DRC
- Category
- Regional
- Severity
- Moderate
- Reach
- Connected
- Onset
- Building
- Direction
- Rising
- Insurance
- Partially insurable
Former president Joseph Kabila has formally allied with armed rebel groups and launched a political and military coalition to replace the M23-AFC alliance, with several rebel leaders as deputies. He accused the government of corruption and poor governance and criticised its minerals deal with the United States. The conflict in the east has already killed thousands.
What we recommend
Review Congolese operations, minerals sourcing and transit routes for exposure to a wider conflict. Confirm staff movement and evacuation arrangements.
GOV-03
Criminal infiltration of police and prosecution
- Category
- Governance
- Severity
- Moderate
- Reach
- Systemic
- Onset
- Building
- Direction
- Stable
- Insurance
- Partially insurable
The suspended deputy national police commissioner resigned shortly after his disciplinary hearing began, and the police service treats the exit as a dishonourable discharge because proceedings were pending. He is in custody on separate criminal charges, which are untested allegations. The Madlanga Commission resumes public hearings on 9 November, after the elections.
What we recommend
Screen counterparties and intermediaries for links to matters before the commission and record the basis of each decision. Expect enforcement capacity to stay degraded through the election period.
GOV-05
Anti-immigrant unrest and the asylum ruling
- Category
- Governance
- Severity
- Moderate
- Reach
- Connected
- Onset
- Immediate
- Direction
- Stable
- Insurance
- Partially insurable
The government will ask a panel of judges on 29 October for court supervision of its compliance with the Constitutional Court ruling on asylum seekers, saying it needs more time to build capacity. The inter-ministerial committee has warned that inciting violence against foreign nationals on social media will be prosecuted, following protests that turned violent and involved looting.
What we recommend
Keep site security and staff travel plans near reception offices and informal trading areas under review through the hearing and the elections. Monitor social media for incitement aimed at your staff or premises.
GOV-08
Road Accident Fund funding stress
- Category
- Governance
- Severity
- Moderate
- Reach
- Connected
- Onset
- Building
- Direction
- Stable
- Insurance
- Not insurable
The Transport Minister has ruled out additional government funding for the Road Accident Fund and rejected its proposal to raise the fuel levy to R3 per litre. A new chief executive has been appointed and a new board is being sought. The fund faces mounting financial pressure and uncertainty about its ability to pay claims, and the minister expects fuel levy revenue to fall as electric vehicle use grows.
What we recommend
Model a levy increase and slower claims payment in fleet, pricing and cash flow assumptions. Review exposure to settlements that depend on the fund.
HLT-06
Medicine price increase and scheme contributions
- Category
- Health
- Severity
- Moderate
- Reach
- Connected
- Onset
- Building
- Direction
- Stable
- Insurance
- Not insurable
A government-approved medicine price increase of 2.88 percent took effect on 1 October and is estimated to add R1 billion to medical scheme costs in 2027. It arrived after schemes had finalised budgets and contribution increases, so they have little room to absorb it. Discovery Health Medical Scheme puts its share at more than R300 million, and uninsured consumers face a further R400 million.
What we recommend
Reserve for group health contributions above plan at the mid-year review and test benefit design against the cost. Review any contract that passes medical inflation through to a customer.
ECO-02
Hunger and social licence
- Category
- Economy
- Severity
- Minor
- Reach
- Systemic
- Onset
- Long-range
- Direction
- Stable
- Insurance
- Not insurable
More than 9.4 million South Africans, 14.7 percent of the population, experienced hunger in 2025, the highest level since 2010, according to the food security index commissioned by the Shoprite Group. The national food security score fell to 52.6 from 56.5, even though food inflation eased to 1.1 percent in August. Cosatu has elected a new president and resolved to back both the ANC and the SACP in the elections.
What we recommend
Expect pressure on wages, pricing and community investment, and be able to show what the business does for the communities around it. Build food security considerations into supplier development and procurement.
HLT-07
National laboratory service governance failure
- Category
- Health
- Severity
- Minor
- Reach
- Contained
- Onset
- Building
- Direction
- Stable
- Insurance
- Not insurable
The Health Minister has appointed a three-member team to address the governance crisis at the National Health Laboratory Service, which supplies almost all diagnostic tests for public hospitals and clinics. It missed the deadline for its 2025/26 annual report, is owed heavily by provincial health departments, and received an audit disclaimer in 2024/25 after a qualified opinion the year before.
What we recommend
Healthcare clients should confirm turnaround times for public laboratory work and contract accredited private capacity in advance. Watch for payment delays to suppliers of the service.
REG-03
Unrest in Mauritius
- Category
- Regional
- Severity
- Minor
- Reach
- Contained
- Onset
- Immediate
- Direction
- Stable
- Insurance
- Partially insurable
Mauritius imposed an overnight curfew after protests over water shortages and the cost of living became the island's worst unrest in decades, with tyres burned, roads blocked and police stations vandalised. A woman was shot and wounded by police at a roadblock, and the officer has been arrested. Traffic was moving normally by Wednesday morning, though renewed protests remain possible.
What we recommend
Check staff, supplier and tourism exposure to Mauritius and keep travel advice current. Confirm that local property and political violence cover is in place.
Where insurance carries the load
The risks no market will take have to be managed, and each needs a different tool. Fuel and input costs are the exposure already landing: clients can fix part of next quarter's spend through forward cover arranged with their bank, write escalation clauses into customer contracts and hold stock where storage allows, accepting that a hedge locks the price in both directions. For the Road Accident Fund, model a levy increase towards the R3 per litre it proposed and assume slower claims payment, which matters most to fleet operators and to any client whose cash flow depends on a settlement.
Illicit trade is a margin and enforcement exposure: audit distributors, document evidence of illegal supply in a form authorities can act on, and price against a market in which an unregistered competitor sets the floor. Dependence on the public laboratory service is answered by contracting accredited private capacity in advance, and rising hunger is answered by procurement and supplier development that keeps communities close to the business.
Where an exposure is retained deliberately, a cell captive or similar alternative transfer mechanism can ring-fence a funded reserve, though fines stay outside it and the structure should be tested. The pattern is the same as last week: what is already landing, fuel costs and the medicine price rise, is what no policy answers, while the insured exposures are the ones still building. Clients that fix hedge ratios, escalation terms and retained reserves before 4 November will meet the quarter with a plan. Insurance discussions should be considered as follows:
Sasria is the sole route for riot and public disorder losses around the election and the asylum protests, and its limits are capped, so the excess above that layer is a decision for each client.
Drought runs to parametric structures placed offshore, because multi-peril crop cover has never taken hold in SA without subsidy, which makes the record El Niño reading a question of trigger design and timing rather than placement.
Livestock mortality is insurable locally, but compensation for notifiable-disease culling sits with the state under the Animal Diseases Act and consequential loss from movement restrictions is commonly excluded.
A utilities extension answers a physical supply failure only after its waiting period, and the malicious damage wording decides whether a substation fire caused by vandalism qualifies.
Political risk in eastern DRC runs to the Export Credit Insurance Corporation and the London market, which respond to expropriation, transfer restriction and trade frustration but not to unrest-driven delay.
Directors and officers, fidelity and legal expenses cover answer defence costs and employee dishonesty where a counterparty is drawn into the commission's work, though a fine is uninsurable, because cover for a penalty offends public policy.
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