Government’s red tape nightmare, and WhatsApp ordered to make changes in South Africa

The South African rand remained stable on Thursday after the finance ministry announced the withdrawal of a controversial increase in value-added tax (VAT) that was scheduled to take effect next month. 

Investors are now awaiting clarity on the government’s budget plans. Major political parties in the country have argued over a proposal to raise VAT by 0.5% on 1 May and an additional 0.5% next year. 

This proposal raised concerns about the stability of the coalition government and caused fluctuations in South African markets in recent weeks. 

The rand was trading at 18.68 against the dollar, close to its closing level of 18.6875 on Wednesday. 

Danny Greeff, co-head of Africa at ETM Analytics, noted that he believes the withdrawal of the VAT hike has not yet been fully reflected in the market.

On Friday, 25 April, the rand was trading at R18.85 to the dollar, R25.05 to the pound and R21.38 to the euro. Oil was trading slightly lower at $67.03 a barrel.

Here are five other important things happening in and affecting South Africa today:

Making it hard to do business: During his first term, President Cyril Ramaphosa aimed to attract R1.2 trillion in direct investment by cutting red tape for business. However, recent regulations are proving the opposite. An example is the recently published regulations to govern investments in the oil and gas sector, where bidders for exploration licenses must include BEE, give 20% shareholding to the state for free, demonstrate employment equity plans, and commit to alleviating poverty in their operational areas. [Business Day]

WhatsApp changes: The Information Regulator has released details regarding WhatsApp’s violation of several sections of the Protection of Personal Information Act (POPIA). As a result, the watchdog issued an enforcement notice to the company at the end of 2024. The notice stated that WhatsApp breached Sections 8, 9, 11, 13, 15, 17, and 19 of the act. [MyBroadband]

Load shedding suspended: Eskom has suspended load shedding several hours early due to improved capacity, low demand and sufficient emergency reserves. Load shedding was suspended at midnight on Friday (25 April) [BusinessTech]

GNU not out of the woods: Despite the VAT hike U-turn, the GNU is still under pressure due to the notable disagreements over the contentious budget. The Democratic Alliance (DA) and the African National Congress (ANC) are set to meet on Thursday for another round of talks relating to the Government of National Unity (GNU). [EWN]

South Africa getting left behind: The World Bank expects South Africa’s economic growth to lag behind most of Africa. Excluding South Africa, Angola, and Nigeria, the bank noted that most of the continent is expected to grow at 4.6% this year. In contrast, it forecasts South Africa to grow 1.8% in 2025. [Engineering News]