Ramaphosa’s Trump fears come true, and pain for all South African taxpayers

The South African rand traded near a five-month high early on Wednesday, just hours before the finance minister was scheduled to present the budget. 

Additionally, President Cyril Ramaphosa was set to meet with US President Donald Trump in an effort to improve relations between the two countries. 

The rand was trading at 17.95 against the dollar, down 0.2% for the day, but still close to its strongest level since mid-December. 

Today, 22 May, we will see how investors respond to Finance Minister Enoch Godongwana’s budget, particularly his decision to refrain from raising value-added tax while opting to increase the general fuel levy. 

The outcomes of the meeting between Ramaphosa and Trump on 21 May, and whether it positively affects relations between South Africa and the United States, will also be crucial.

On Thurssday, 22 May, the rand was trading at R17.96 to the dollar, R24.12 to the pound and R20.35 to the euro. Oil was trading slightly lower at $64.94 a barrel.

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

Ramaphosa’s Trump fears come true: President Cyril Ramaphosa’s first meeting with US President Donald Trump appeared to fulfil fears that the South African leader was walking into a trap. It was “definitely an ambush, because the program format was changed at the last minute,” South African Presidency spokesman Vincent Magwenya said in an interview after the meeting. “You could see, standing inside the Oval Office, that this was a well-planned, well-orchestrated operation.” [Bloomberg]

Pain for taxpayers: Godongwana removed the VAT hikes after pushback from the GNU and the courts. However, individual taxpayers will still get no relief from the impact of inflation (so-called fiscal drag). He also hiked the fuel levy for the first time in three years, and pencilled an additional R20 billion of tax hikes into next year’s budget without giving details. [BusinessTech]

South Africa’s internet blackout: On May 21, 2025, NAPAfrica, a crucial Internet exchange point in South Africa, experienced two incidents that caused a national outage for several minutes due to a software bug in networking equipment, which failed to handle a surge of traffic. [Mybroadband]

Big changes for Pick n Pay: James Formby, the former CEO of RMB, will take over as chairperson of Pick n Pay from Gareth Ackerman when he retires in August. Formby has been the group’s lead independent director since joining the board in October 2022. [News24]

Above-inflation wage deal to avoid strikes: The Commission for Conciliation, Mediation, and Arbitration proposed a settlement granting a 6% salary increase for all Transnet bargaining unit employees, effective retroactively from 1 April 2025 for three years. As stated by the United National Transport Union, Transnet will also ensure no mandatory retrenchments during this period. [Engineering News]