Budget heading to court, and US tariff blow to South Africa

The South African rand experienced a notable drop on Wednesday (2 April) due to a contentious budget vote that raised concerns about the stability of the coalition government.

The rand traded at 18.77 against the dollar, which was about 1.4% weaker than the closing level on Tuesday.

The fiscal framework and revenue proposals of the budget were approved in parliament, as the ANC, the largest party in the coalition, garnered support from various smaller coalition partners and other parties outside the coalition.

Additionally, the Johannesburg Stock Exchange’s Top-40 index closed down by 0.9%, and the yield on the benchmark 2030 government bond increased by 21 basis points to reach 9.3%.

On Thursday (3 April), the rand was trading at R18.51 to the dollar, R23.92 to the pound and R19.99 to the euro. Oil is trading lower at $74.52 a barrel.

Here are five other news stories making waves in South Africa today:

Budget heading to court: Following the passing of the Budget in Parliament, DA leader and Agriculture Minister John Steenhuisen announced that it would be heading to the Western Cape Division of the High Court to challenge the passing of the vote. [Daily Maverick]

US tariff hit: US President Donald Trump has announced a global 10% tariff on all imports and higher rates for a slew of ‘worst offenders’, including South Africa. For South Africa, Trump claimed that the tariffs on the United States amounted to 60%. In turn, it will implement a “discounted” 30% tariff on the country. [BusinessTech]

More electricity hikes likely: Professor Mark Swilling, co-director of Stellenbosch University’s Centre for Sustainability Transitions, highlights that South Africa’s approach to setting electricity tariffs is flawed. He anticipates that, despite the 12% increase approved by Nersa for 2025/26, Eskom’s tariff adjustment requests will keep rising over the next few years. [MyBroadband]

Blow to low-cost medical aid: A recent court judgment denied the Board of Healthcare Funders’ (BHF) request for local medical schemes in South Africa to offer Low-Cost Benefit Options (LCBOs). The government, which opposed the BHF’s challenge, stated that the newly legislated National Health Insurance (NHI) would provide adequate coverage for low-income members. [Business Day]

Severe weather warning: The South African Weather Service (Saws) has released its latest weather forecast for Thursday, 3 April 2025. Severe thunderstorms are expected in parts of Gauteng, Northern Cape, North West and the Free State, while disruptive rainfall is forecast for parts of Mpumalanga. [The Citizen]