SA's foreign debt choices can't be left to lenders and officials
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IOL News
4 hours ago
- IOL News
South Africa braces for economic turmoil as US export tariffs take effect
US President Donald Trump last month announced that his administration would levy a staggering 30% tariff on all South African products entering the US, with some exclusions or reduced tariffs on metals and minerals, in a bid to address long-standing trade imbalances and unfair market restrictions. Image: Brendan Smialowski/AFP August 1, 2025, marked the dawn of a new era for South Africa, albeit a troubling one, as a hefty 30% export tariff to the United States came into effect. This significant policy change has sent ripples through the nation's economy, stirring anxiety among businesses and consumers alike. With no agreement in sight to prevent this trade burden, South Africans are bracing themselves for the ramifications on both local markets and international trade relations. US President Donald Trump last month announced that his administration would levy a staggering 30% tariff on all South African products entering the US, with some exclusions or reduced tariffs on metals and minerals, in a bid to address long-standing trade imbalances and unfair market restrictions. South Africa exports billions of rands' worth of goods to the US each year, including fruit, vegetables, meat, and wine. These sectors employ thousands of workers, and the 30% tariff will render their products uncompetitive in the American market, placing immense pressure on producers and exporters. Major South African exports to the US include precious stones and metals, motor vehicles, parts and accessories; iron and steel, machinery; aluminium products, ores, organic chemicals, chemical products, nickel products, agricultural products such as citrus fruits, wine, processed foods. According to estimates, the tariffs will add roughly $3.5 billion (R63bn) to the cost of exports to the US, based on South Africa's 2023 export value. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Thys van Zyl, CEO of Everest Wealth Advisory, on Thursday said South Africa was facing severe economic consequences without any formal agreement in place with its second-largest bilateral trading partner. 'It is almost unthinkable that, on the eve of such far-reaching tariffs, we still do not have a formal agreement – or even a timeline for when one can be expected. This is not only deeply concerning – it is negligent,' Van Zyl said. Despite discussions between the relevant stakeholders, there are no confirmed exemptions, no concessions, and no sign of progress in negotiations with the US government. The government has denied claims of a trade imbalance between South Africa and the US, maintaining that the 30% reciprocal tariff was not an accurate representation of available trade data. Minister of Trade, Industry and Competition, Parks Tau, this week said they were working with other government departments on a response plan that also focuses on demand side interventions in the impacted industries. Tau said the government was awaiting substantive feedback from the US counterparts on the final status on its Framework Deal, which proposed importing 75-100 petajoules of Liquified Natural Gas for a 10-year period, simplifying of US poultry exports under the 2016 tariff rate quota, and private sector commitments to invest $3.3bn in US industries such as mining and metals recycling. However, Van Zyl said the lack of a formal agreement was sowing uncertainty for long-term business planning and investment beyond the immediate cost pressures. 'The only constant is uncertainty. Our export sectors are now left to fend for themselves – simply because the government acted too late and too vaguely,' said Van Zyl. 'Investors seek certainty – and what they're now getting is ambiguity and silence. This is the kind of uncertainty that drives capital away. We need a proactive trade policy – one driven by results, not rhetoric. The government must take responsibility for this disastrous diplomatic outcome, and immediately table recovery plans to protect the export sector and restore investor confidence.' Meanwhile, Foord Asset Management portfolio manager Farzana Bayat said a 30% tariff wall on South African exports to the US would be catastrophic and escalate trade risk. 'That would be a seismic shock. Even traditional US allies like the EU and Japan have negotiated reduced 15% tariffs - South Africa may not be so lucky,' Bayat said. She said the stakes were high as the expiry of the African Growth and Opportunity Act in 2025 was already clouding the medium-term trade outlook. Bayat said the immediate risk was acute as the South African Reserve Bank Governor Lesetja Kganyago recently warned that up to 100 000 jobs were at risk, and the automotive and citrus industries were especially exposed. Car exports to the US have already collapsed by more than 80% due to earlier tariff pressures. 'This economic stress comes at a time when South Africa is already contending with low growth, power insecurity, and shaky investor confidence,' Bayat said.'Losing preferential access to the US - our third-largest trading partner - could be devastating.' BUSINESS REPORT
The South African
4 hours ago
- The South African
Paul Mashatile scrutinised over Constantia mansion affordability
Like many South Africans, former COSATU general secretary Zwelinzima Vavi has questioned how Deputy President Paul Mashatile can afford to stay in not one, but three homes worth around R65 million. This week, the 64-year-old officially declared ownership of a R28 million Constantia villa after years of speculation. Mashatile also owns residential homes in Midrand and Kelvin, in Johannesburg. In an X post, Zwelinzima Vavi posted his calculations of how Paul Mashatile could afford just one of his properties – a R28 million Constantia Upper villa. Mashatile earns R3.2 million per annum on his deputy president's salary. Vavi posted: 'Estimated monthly take-home pay: R 161,200. Monthly bond repayments range from R 248,000 to R 280,000, significantly exceeding his take-home pay.' He added: 'No bank will approve the loan based on the government salary. So there has to be another income from elsewhere'. According to luxury real estate agent Gary Phelps, Paul Mashatile's home comes with a hefty upkeep. Speaking to eNCA , he stated that this included rates and taxes up to R40 000 a month, excluding essential maintenance services. A mortgage would cost at least a quarter of a million rand a month. 'You've got to earn about R1.2 million a month to qualify to buy this house,' Phelps added. Deputy President Paul Mashatile's Constantia mansion. Images via Seeff Properties/ Instagram: @humile_mashatile Inside Paul Mashatile's multi-million rand home. Images via Mashatile also owns a R39 million mansion in Waterfall in Midrand, and another in Kelvin, Johannesburg. According to an official financial interests report, Paul Mashatile had no other assets or businesses to declare, barring a pension fund and an Old Mutual investment trust. Mashatile has repeatedly denied any direct ownership of his Cape Town and Johannesburg homes. The Deputy President previously stated that the Constantia villa had been acquired via his son-in-law, Nceba Nonkwelo, who is married to his daughter, Palesa. He also claimed that his Waterfall estate had been'purchased jointly by his sons and son-in-law – who is reportedly under investigation by the Hawks – through a normal bank loan' and is 'used as a family residence due to its enhanced security.' Mashatile's spokesperson, Keith Khosa, also denied allegations that Mashatile's sons Thabiso and Tinyiko were linked to multi-million rand government tenders acquired through departments he previously managed. Last year, the DA laid criminal charges against Paul Mashatile on allegations of corruption, nepotism, and patronage, claiming that the Deputy President was the ultimate beneficiary. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.
The Citizen
7 hours ago
- The Citizen
Household food basket stable, but price of meat eating into consumers' budgets
The battle continues for low-income South Africans to afford nutritious food. The average price of the household food basket was stable in July, decreasing by 41 cents from June, but it is clear that the price of meat is eating into the budgets of low-income consumers. According to the household food basket, compiled by the Pietermaritzburg Economic Justice and Dignity Group, the household food basket cost R5 442.72 in July, 41 cents more than in June when it cost R5 443.12, but R190.57 (3.6%) more than in July last year, when it cost R5 252.15. The household food basket is part of the Household Affordability Index compiled by the Pietermaritzburg Economic Justice & Dignity Group from a survey of prices of 44 basic foods from 47 supermarkets and 32 butcheries. ALSO READ: Household food basket a little cheaper in June The survey is conducted by women from low-income communities in Johannesburg, Durban, Cape Town, Pietermaritzburg, Mtubatuba in Northern KwaZulu-Natal and Springbok in the Northern Cape at shops where they shop for their families. Price trends in household food basket Key data from the July 2025 Household Affordability Index shows that the price of 17 of the 44 food items in the household food basket cost more, while 26 food items cost less, while the price of one item stayed the same. Food items in the household food basket that cost more than 5% more than last month include beef (8%), beef tripe (7%) and butternut (20%), while food items that cost between 2% and 5% more, include: full cream milk (3%), chicken feet (4%), chicken gizzards (4%), beef liver (3%), wors (3%), fish (3%), cabbage (2%), polony (4%) and brown bread (4%). The survey shows that food items in the household food basket that cost at least 5% less, include maize meal (-5%), salt (-6%), carrots (-5%), spinach (-6%), bananas (-13%), oranges (-15%) and peanut butter (-5%). Food items that cost between 2% and 5% less, include: cake flour (-2%), white sugar (-2%), sugar beans (-2%), cooking oil (-2%), potatoes (-4%), onions (-3%), eggs (-3%), apples (-3%), margarine (-2%) and apricot jam (-2%). The average price of the household food baskets Johannesburg (R7.58 more), Durban (R45.87 more) and Mtubatuba (R60.32) cost more than in June, while the baskets cost less in Cape Town (R25.88 less) Springbok (R36.93 less) and Pietermaritzburg (R54.43 less). Statistics South Africa's latest Consumer Price Index for June shows that headline inflation was 3.0% and 4.7% for expenditure quintile 1, for quintile 2 it is 4.1% and 3.7% for quintile 3. Food inflation was 4.7%. ALSO READ: Inflation increases in June as food prices increase to 15-month high Food basket unaffordable for those earning minimum wage While these prices do not seem too high for middle-class consumers, it is not easy for workers who earn the national minimum wage of R28.79 per hour, or R230.32 for an 8-hour day and R4 836.72 for an average 21-day working month. July had 23 working days, which means that the maximum wage for a general worker was R5 297.36. Workers work to support their families and therefore the wage they earn is not just to sustain themselves alone but support the entire family, Mervyn Abrahams, programme coordinator at the group, says. He points out that for black South African workers, one wage must typically support four people. Dispersed in a worker's family of four, the wage is R1 324.34 per person, far below the upper-bound poverty line of R1 634 per person per month. With the average cost of a basic nutritional food basket for a family of four costing R3 755.87 in July, using the Pietermaritzburg figures for electricity and transport and the average figure for a minimum nutritional basket of food for a family of four, the group calculates that electricity and transport take up 57% (R3 021.85) of a worker's wage. Workers only buy food after paying for transport and electricity, leaving R2 275.51 for food and everything else. Workers' families will then underspend on food by a minimum of 39.4%. Abrahams says in this scenario there is no possibility of a worker being able to afford enough nutritious food for her family. If she used the entire R2 275.51 to buy food, it would provide R568.88 per person per month for a family of four, again far below the food poverty line of R796 per person per month. ALSO READ: Here's why maize meal prices may drop this year Cost of feeding a child nutritious food It gets even more difficult for low-income consumers to feed their children nutritious food. The average monthly cost to feed a child a basic nutritious diet was R957.41 in July, after a decrease of R13.48 (-1.4%), but R21.70 (2.3%) more than a year ago. Abrahams points out that the child support grant of R560 is 30% below the food poverty line of R796 and 42% below the average monthly cost to feed a child a basic nutritious diet (R957.41). Workers must then also put money aside for household domestic and personal hygiene products that cost R1 021.56 in July. Abrahams says basic hygiene products are expensive but are part of the monthly groceries and therefore compete in the household purse with food as these products are essential for good health and hygiene as well as dignity.
