Star 2025-02-24

With US tariffs threatening global trade and South Africa’s fiscal reserves depleted, Nedbank chief economist Nicky Weimar laid out a pragmatic plan for economic survival on Friday. She called for sharp cuts in government spending, a boost in efficiency, and a deft diplomatic strategy to counter America’s economic pressure—warning against populist tax hikes or a reckless tit-for-tat with the Trump administration. Her remarks come amid a fiscal crisis underscored by last week’s unprecedented delay of Finance Minister Enoch Godongwana’s Budget, now postponed to March as Government of National Unity partners scramble for consensus. A proposed 2% VAT hike—scrapped after backlash over its impact on the poor—exposed the government’s dire straits. “They’re finally out of money. Solidly,” Weimar said, noting debt at 76% of GDP and a struggle to shrink the…

South Africa is on course to exit the Financial Action Task Force’s (FATF) greylist by October after having addressed nearly all the deficiencies that were identified in the country’s financial security systems, National Treasury said Friday. To meet the final obligations that will enable South Africa to exit the greylist, the FATF wants South Africa to demonstrate “a sustained increase in investigations and prosecutions of serious and complex money laundering and the full range of TF (terrorist financing)” - these are usually the most demanding goals of every country’s systems. On Friday, the FATF announced the upgrade of four of the six outstanding action items for South Africa at the conclusion of its latest plenary meetings in Paris, France. South Africa was now deemed to have addressed or largely addressed…

Efforts must be made to ensure that the benefits of growth are equitably distributed across society The World Bank Group has called on the South African government to enhance the efficiency of public spending to facilitate high-quality and affordable infrastructure services, a move essential for driving inclusive economic growth. This call comes in light of Finance Minister Enoch Godongwana’s recent decision to postpone the tabling of the 2025 Budget Review in Parliament to allow for further consultations over proposed tax increases, including a potential two-percentage-point rise in value-added tax (VAT) due to persistent spending pressures. In a forthcoming report, titled “Driving Inclusive Growth in South Africa: Quick Wins with Competitive Markets and Efficient Institutions,” the World Bank emphasises that recent political and economic shifts present a pivotal opportunity for policymakers.…

The government has committed to continue exploring all possible avenues to avert job losses in the steel industry and support affected workers on the back of ArcelorMittal South Africa’s (Amsa) decision to wind down its long steel business. This comes after the National Union of Metalworkers of South Africa (Numsa) staged a picket outside the Industrial Development Corporation (IDC) on Friday to voice their demands. The picket was also joined by workers from SA Steel Mills who are demanding that the business rescue process must be wrapped up quickly so that workers can get the money due to them. The Department of Trade, Industry and Competition (the dtic) on Saturday said the government was doing all it can to ensure the resilience of South Africa’s steel sector. The dtic said…

Looking at South Africa’s macro outlook, consensus expectations are for GDP growth to come in between 1.5% and 2.0%. This would be a respectable improvement from the circa 1% growth the country has experienced over the past decade, being driven by improving confidence in the wake of a broad-based coalition government (fundamental policy differences amongst the major parties aside). As a result, optimistic expectations for businesses tied to the domestic economy appear reasonable, and most domestic assets have rerated meaningfully from what had been undemanding levels. South African listed property has been one of the major beneficiaries of this turn in sentiment. SA economic prospects compare favourably to Europe’s Juxtaposing SA’s growth expectations with those of advanced economies, where some JSE-listed property companies generate all their earnings (such as the…

Through a three-step dance, Steinhoff and related companies managed to fudge the purchase and sale price of a group of furniture companies and related properties. This process allowed Steinhoff to reduce the value of receivables that it created for “various business reasons” as well as use the rationale of commission on the sale of the properties to manipulate money flows. One of the accounting techniques Steinhoff used before it imploded to manipulate its accounts included selling technical “know how,” or expertise from one Steinhoff entity to another, when this knowledge was without economic value. In the case of the kika Leiner property companies, a lengthy PwC investigation lays bare how Steinhoff moved money around to balance its books and to appear to comply with German regulations. The three-step process started…