Star 2025-04-23

As the African Growth and Opportunity Act (Agoa) faces uncertainty over its renewal in September, South Africa's automotive industry is bracing for turbulence, with experts on Tuesday warning of significant repercussions if the preferential trade programme is allowed to expire. The Agoahas been a cornerstone for the country’s automotive sector, providing duty-free access to the lucrative United States market. Without it, the local automobile landscape could face dire consequences. Renai Moothilal, CEO of the National Association of Automotive Component and Allied Manufacturers (Naacam), stressed the critical role that Agoa has played in not just boosting export growth, but also attracting vital investments into South Africa’s automotive sector over the past two decades. “Agoa provides South African automotive component and vehicle manufacturers with preferential, duty-free access to the US market. This…

The IMF on Tuesday projected SA’s GDP to rise only to 1% in 2025, and 1.3% in 2026 The International Monetary Fund (IMF) has slashed South Africa’s economic growth projections for 2025 by 0.5 percentage on the back of slowing activity in the country’s two largest trading partners amid rising US tariffs. The US government announced sweeping reciprocal import tariffs on 60 countries earlier this month, sparking retaliation and raising trade barriers to levels not seen since the Great Depression. In its World Economic Outlook (WEO) for April, the IMF on Tuesday projected South Africa’s real gross domestic product (GDP) to rise only to 1% in 2025 and 1.3% in 2026, which will also drag down the Sub-Saharan African economy. Though this projection is an increase from 0.6% in 2024…

The National Energy Regulator of South Africa (Nersa) has recommended acceleration of policy and regulatory reforms to entrench gas in the country's energy mix. This call comes against the backdrop of ongoing concerns regarding the underdevelopment of the local gas industry, which remains heavily reliant on the Sasol Mozambique natural gas project due to a lack of significant indigenous proven gas reserves. According to the strategy report published by Nersa on Tuesday, the energy regulator pointed out that while there's a robust long-term potential for domestic gas production, immediate steps must be taken to diversify gas supply sources. This includes enhancing pipeline connectivity from Mozambique via the ROMPCO pipeline and securing liquefied natural gas (LNG) imports from both regional and international markets. Despite the promising synergies between natural gas and…

In what must be the strangest political marriage since the dawn of democracy, a court case instigated by both the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) to prevent a VAT increase started today. The court action, in the Western Cape High Court, has been filed against the Minister of Finance and other entities, including the South African Revenue Services. While judgement is likely to be reserved, the outcome of the matter will affect everyone given that inflation will be adversely affected. Investec chief economist, Annabel Bishop, has already worked out that a 0.5 percentage point increase in VAT will add 0.25 basis points to inflation for each of the two years proposed in the National Budget tabled in March. The DA, this morning during a press conference,…

On the second week of April 2025, South Africa woke up to a surprise that Tanzania’s Minister of Agriculture was contemplating to introduce measures to prohibit South African agricultural products from entering the Tanzanian market. This was rather unexpected that Tanzania threatens South Africa about banning its agricultural products that are headed to that country, as well as those that are transiting to its surrounding countries via Dar as Salaam port. This was unexpected because Tanzania's Agriculture Minister, Honourable Mr Hussein Bashe, handled the issue simultaneously to that of Malawi. Malawi and Tanzania have experienced several restrictions together. For example, Tanzanian maize has been prohibited from entering Malawi due to concerns about Lethal Necrosis (MLN) in late 2023. More recently, flour and rice have been restricted, while Tanzanian bananas are…

The short-term insurance industry is facing increased pressure from two directions: proposed domestic tax hikes and global trade uncertainty. Taken together, these developments are likely to deepen financial strain on policyholders while simultaneously threatening the growth and stability of the insurance sector itself. The Finance Minister’s proposal to incrementally increase VAT – from 15% to 15.5% in 2025 and then to 16% in 2026 – will directly affect the cost of financial services, including short-term insurance. Insurers have begun giving notice of increases to policyholders, given that VAT is a compliance requirement (and thus does not provide them with additional revenue). The result: higher premiums for policyholders at a time when household incomes are already under pressure from sub-inflationary wage growth and rising living costs. For businesses, the situation is…