Government

5 important things happening in South Africa today

Staff Writer

 ·2 Nov 2023

Here’s what is happening in and affecting South Africa today:

• Good news for SA trade: This week, the US cut Uganda, Gabon, Niger and the Central African Republic out of the African Growth and Opportunity Act (Agoa). The Biden White House did not put SA on the chopping block in its annual eligibility report to Congress, making experts cautiously optimistic that South Africa will maintain its membership. This will save at least 30,000 jobs in the Western Cape alone and increase trade from an annual R50 billion-plus. [Business Day]

• Municipal dictatorship: SA’s biggest commercial property owner, Growthpoint, says municipalities take more and give less without care, which is hurting business and investment. “Objections to high municipal rate increases are disregarded, and service requests go unanswered, but passing on more costs to tenants is difficult because the weak economy and load-shedding disruptions have placed businesses under financial strain. Increasing tenant costs could result in more business failures, higher vacancies and decreased investment,” said Group CEO Norbert Sasse. [Daily Maverick]

• Tax hit on the cards for 2024: South Africa will be hit by a R15 billion tax hike in February as Treasury scrambles to deal with government overspending and rocketing borrowing costs. South Africa’s main budget deficit has increased by R54.7 billion compared to 2023 Budget estimates, according to the medium-term budget policy statement presented on Wednesday (1 November). [BusinessTech]

• R140 billion chopped from state budgets: Deep spending cuts of over R140 billion over the next two and a half years are in the pipeline as the Treasury adapts to lower tax revenue, higher borrowing costs, and higher wages for public servants agreed to earlier this year. However, immediate cuts of R21 billion – that will take effect over the next six months – include deep cuts to housing, higher education and health, in particular the HIV/Aids budget. [News24]

• Markets:  The rand strengthened on Wednesday after South Africa’s mid-term budget statement, despite the proposal for tax measures next year to raise additional revenue as budget deficits are projected to widen over the next three years. On Thursday, the rand was trading at R18.48 to the dollar, R22.50 to the pound and R19.59 to the euro. Oil is trading at $85.42 a barrel. [Reuters]