Investors have a message for Ramaphosa

Donald Trump’s return as President of the United States has caused global uncertainty, but President Cyril Ramaphosa and his Government of National Unity (GNU) have to focus on local fundamentals to boost the economy.
“Right now, Trump policy is the biggest known-unknown of 2025,” said Citadel Portfolio Manager, Mike van der Westhuizen.
“The big question around US policy is whether the bark is bigger than the bite.”
But beyond the uncertainties that exist outside South Africa, what we do have control over is how we manage the systemic issues in the South Africa economy – and this is where our new Government of National Unity (GNU) needs to act, he said.
Van der Westhuizen said South Africa’s economic growth is expected to average 1.8% per annum over the coming years.
However, it needs to grow closer to 3% to sustainably grow the country out of its unemployment crisis and shaky but improving fiscal position
To turn the economy around, he said that it is time for a massive uplift in sentiment towards the GNU to be turned into real action.
Although many departments are pushing ahead with new and improved initiatives, actual economic progress has been mediocre.
He said that the government must now start walking the talk in a more meaningful and impactful way.
“In terms of energy security, the break in load shedding has been an immense tailwind. More needs to be done to ensure longer-term energy security,” said Van der Westhuizen.
“Fixing the rail and port issues is critical to our export sector and has cost foregone trade revenue.”
“Other issues like water security and decay at municipality level are also problems that require urgent attention.”
“Policy execution has hamstrung progress in the past and the GNU now has the perfect opportunity to prove the doubters wrong.”
Although South Africa is experiencing low inflation (3.0% in December), energy prices are still high and global inflation is increasing.
Nevertheless, South African inflation should remain at lower levels compared to previous highs, which will give the South African Reserve Bank
He added that SA inflation should remain ‘well behaved’, which gives the South African Reserve Bank (SARB) room to cut interest rates twice or thrice in 2025.
Although the inflation outlook remains uncertain for many experts, most economists expect the Reserve Bank’s Monetary Policy Committee to cut rates when it meets next week.
Some positive signs
Despite the fears of Donald Trump, Maarten Ackerman, Chief Economist at Citadel, noted that many of his anticipated policies have already been priced in by markets.
This has led to immediate market reactions following his inauguration on the 20th of January 2025.
Nevertheless, proposed policies, such as higher trade tariffs on China, are expected to have ripple effects for emerging markets like South Africa.
He added that trade wards could weaken global growth and pressure the rand.
Nevertheless, aggressive Chinese economic stimulus could benefit South Africa as a key commodity exporter.
Ackerman also said that there are risks to risks related to the African Growth and Opportunity Act (AGOA), which is crucial for South Africa’s automotive sector, among other things.
Ackerman also flagged risks related to the African Growth and Opportunity Act (AGOA), which is crucial for South Africa’s automotive sector and others.
The reduction in AGOA benefits could thus hurt South Africa’s few growing manufacturing sectors, which could have a serious impact on GDP and jobs.
Moreover, Trump’s policies are set to boost the US dollar, which will put further strain on South Africa’s growth partners.