A potentially powerful El Niño event is developing, raising the prospect of hotter and drier conditions across much of southern Africa and placing fresh pressure on households, businesses and already stretched infrastructure.
For South Africans, the threat extends well beyond the weather forecast. A severe El Niño could push up food prices, increase pressure on water supplies, damage property, heighten wildfire risks and test the resilience of businesses and public infrastructure.
Simon Schaefer, senior economist at Deloitte Africa, says the phenomenon could become a test of the country's broader economic resilience.
“A potentially significant El Niño is gathering strength, raising the prospect of hotter and drier conditions across much of southern Africa in the months ahead. El Niño does not produce the same rainfall patterns in every season or every part of the country. Yet uncertainty about outcomes does not eliminate the underlying risk,” he says.
El Niño is a naturally occurring climate pattern and is not caused by climate change. However, it is now occurring against a warmer background climate, which can amplify some of its effects.
The World Meteorological Organization and the US National Oceanic and Atmospheric Administration (NOAA) have reported that a strong El Niño is developing, with NOAA putting the probability of a very strong event in the latter part of 2026 and early 2027 at more than 90%.
The cost could reach the shopping trolley
One of the most immediate consequences for households could be higher food prices.
Below-average rainfall and prolonged heat can reduce agricultural yields, particularly in important crop-producing areas. Producers may then face higher irrigation, feed and input costs, while imports can become more expensive.
Bertie Nel, head of financial planning and advice at Momentum, says climate risks should increasingly be regarded as financial risks.
“A Super El Niño is an exceptionally strong El Niño event that disrupts global weather patterns. In Southern Africa, it is typically associated with below-average rainfall, prolonged heat and drought conditions, which can reduce crop yields and place pressure on food supplies and prices,” he says.
Consumers cannot control global weather patterns, but they can make adjustments. Growing vegetables and herbs at home, buying non-perishable staples in bulk and choosing seasonal, locally produced food can help households manage grocery bills.
Water, electricity and infrastructure under pressure
Drought would also test South Africa's water systems. Municipalities already facing ageing infrastructure, water losses and operational challenges could come under additional pressure if conditions become substantially drier.
The effects could spread to mining, manufacturing, tourism and other water-intensive industries, potentially affecting economic activity and supply chains.
“South Africa should take note. A severe drought would affect far more than agricultural output. It would test the resilience of water infrastructure already under pressure in many municipalities,” Schaefer says.
For households, hotter conditions can also increase electricity demand, while rising electricity and water tariffs are already putting pressure on monthly budgets.
Energy-efficient appliances, solar water heating and rainwater-harvesting systems can reduce consumption and provide some protection against future cost increases.
The growing risk to homes and property
The financial threat is not limited to higher monthly expenses. Extreme weather can turn into expensive, unexpected repair bills.
Heat can damage roofing and waterproofing, while hail, high winds, lightning and localised flash flooding can cause significant damage within minutes. Dry conditions can also sharply increase the risk of veld and wildfires, particularly where residential areas meet unmanaged or invasive vegetation.
Christelle Colman, CEO and founder of Ami Underwriting Managers, says El Niño should not itself be viewed as an insured event.
“El Niño is not itself an insured peril but a risk multiplier that can create the conditions in which fires, storms, floods and other insured events become more likely or more severe,” she says.
Insurers are already monitoring the developing pattern, reviewing catastrophe and reinsurance protection, stress-testing claims capacity and assessing concentrations of insured homes and vehicles.
“The forecast should be treated as an early-warning window. It gives us an opportunity to prepare before losses occur,” Colman says.
For homeowners, that preparation should include clearing gutters, checking roof seals and drains, cutting back dry vegetation and keeping combustible materials away from buildings.
Insurance cover should also be reviewed regularly. Building and contents cover needs to reflect current replacement costs, rather than the value of a property or its contents several years ago.
“Do not insure the house you bought ten years ago. Insure the home you would have to rebuild tomorrow,” Colman says.
Lessons from Knysna
The devastating Knysna fires in 2017 remain a powerful reminder of how environmental and weather conditions can combine to create an insurance catastrophe. The fires resulted in approximately R2 billion in insured losses.
“Knysna showed that a catastrophe is seldom caused by one factor. Drought, wind, the state and type of vegetation, development patterns and limited access for emergency services combined to turn a fire into a disaster,” Colman says.
The lesson is that the condition of a property and its surroundings matters. Dry vegetation, leaves in gutters, firewood stacked against walls and invasive trees can all increase a property's vulnerability.
Households should also check their motor insurance. Third-party-only cover generally does not protect against damage to the owner's own vehicle, while comprehensive cover may respond to risks such as fire, hail and flooding, depending on the policy wording.
Creating a room-by-room video inventory of household possessions and keeping receipts, valuations and policy documents securely online can also make the claims process easier. High-value items may require updated valuations or separate specification on a policy.
Building a financial buffer
As costs rise, households can be tempted to cancel insurance or draw down long-term savings to cover immediate expenses. Nel warns that this can leave families more exposed when another shock arrives.
An emergency fund covering three to six months of essential expenses can provide a buffer against unexpected repairs, medical costs or utility increases without forcing households into expensive debt.
Short-term insurance protects physical assets, while life and income protection can help protect a household's earning capacity.
“A resilient financial plan needs built-in safeguards to absorb shocks,” Nel says.
Regular financial reviews can help households identify unnecessary expenditure, assess their exposure to inflation and ensure that insurance and savings remain aligned with changing circumstances.
A test of economic resilience
For Schaefer, the bigger issue is not simply whether the coming season is wetter or drier. It is whether South Africa has used periods of favourable conditions to strengthen the systems that will be tested during a drought.
“Climate shocks are often described as environmental events. Increasingly, they are economic events as well,” he says.
That means the impact of El Niño will depend not only on the severity of the weather but also on the resilience of infrastructure, institutions, businesses and households.
For consumers, the response need not be panic. It should be preparation.
“Insurance is only one part of resilience; prevention matters enormously!” Colman says.
Her advice is straightforward: review insurance before the event, understand exclusions and excesses, check that property and possessions are adequately covered, and reduce physical risks around the home.
“If a fire originates on or spreads from your property, questions of legal liability may arise. Property owners should check their liability cover and make sure they understand their responsibilities,” she says.
And if authorities order an evacuation, the priority is not property but people.
“Insurance can help rebuild a home but cannot replace a life,” Colman says.
THE NATIONAL