{"id":837142,"date":"2025-09-09T11:00:00","date_gmt":"2025-09-09T09:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=837142"},"modified":"2025-09-09T10:55:06","modified_gmt":"2025-09-09T08:55:06","slug":"south-africa-could-face-another-disaster","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/837142\/south-africa-could-face-another-disaster\/","title":{"rendered":"South Africa could face another disaster"},"content":{"rendered":"\n

Experts warn that South Africa could face another major economic disaster if it were ever cut off from the SWIFT global payment system. <\/p>\n\n\n\n

Frederick Mitchell, chief economist at Aluma Capital, said the impact of losing access to SWIFT would be devastating. <\/p>\n\n\n\n

\u201cThe potential loss of access to the SWIFT payment system poses a profound threat to South Africa\u2019s economy, with repercussions that could undermine both our national stability and future growth prospects,\u201d he explained.<\/p>\n\n\n\n

\u201cAs a nation heavily reliant on international trade, the disruption or suspension of our connection to this vital global financial communications network would significantly impair our ability to conduct cross-border transactions efficiently, leading to economic isolation and heightened volatility in the value of the rand.\u201d<\/p>\n\n\n\n

Mitchell warned that without SWIFT, South African banks and businesses would face major delays in sending and receiving payments. This would slow trade, hurt investment, and likely cause the rand to drop sharply. <\/p>\n\n\n\n

\u201cA weaker rand would make imports more expensive, fuelling inflation and placing additional pressure on consumers already struggling with high living costs,\u201d he said.<\/p>\n\n\n\n

Rising prices would put the Reserve Bank in a tight spot, forcing it to raise interest rates sooner than expected. However, while this could control inflation, it would also push up borrowing costs and further weaken economic growth.<\/p>\n\n\n\n

Mitchell added that the risk is that the country could slip into stagflation, where growth stalls, inflation rises, and unemployment worsens. <\/p>\n\n\n\n

\u201cThe resulting uncertainty would deter foreign direct investment, which is critical for infrastructure development and job creation. It would also undermine the confidence of our trading partners,\u201d he said. <\/p>\n\n\n\n

In addition, investors could withdraw money from the country, putting even more pressure on the rand and making the economy even harder to manage. Mitchell believes South Africa must act quickly to protect itself. <\/p>\n\n\n\n

\u201cThe government must prioritise prudent fiscal and monetary management, responsibly handling increasing debt, strengthening resilient trade partnerships, and bolstering economic sovereignty,\u201d he said. <\/p>\n\n\n\n

\u201cEngaging in proactive diplomacy and negotiating in good faith with Western nations, alongside implementing strategic economic policies, will help South Africa protect its financial system from external shocks and sanctions.\u201d<\/p>\n\n\n\n

The issue of US dominance<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Harry Scherzer, CEO of Future Forex, agrees that being cut off from SWIFT would be disastrous, but he stressed that it is not likely to happen soon. <\/p>\n\n\n\n

\u201cWhat\u2019s actually happening is that the US are looking at sanctioning certain politicians from the ANC who haven\u2019t been making friends with the US, rather than the country as a whole,\u201d he said. <\/p>\n\n\n\n

\u201cSo it doesn\u2019t look like there\u2019s going to be any impact on South Africa as a whole, or South African businesses, unless those businesses were tied to those individuals.\u201d<\/p>\n\n\n\n

However, Scherzer warned that if it ever did happen, the results would be severe. <\/p>\n\n\n\n

\u201cIt would be a really tricky situation. We\u2019ve seen what\u2019s happened in Russia, Iran, and others that have been sanctioned from the SWIFT system. It\u2019s something that really wouldn\u2019t be good for our GDP. It wouldn\u2019t be good for our economic growth,\u201d he said.<\/p>\n\n\n\n

Scherzer argued that at the core of the issue is the overwhelming power of the United States.<\/p>\n\n\n\n

\u201cIt\u2019s absolutely amazing how much power the US have here. While they can\u2019t kick South Africa off the SWIFT system entirely, they can avoid or stop South Africa from making USD payments on the SWIFT system, which is pretty much the global currency.\u201d<\/p>\n\n\n\n

For him, this is part of a wider geopolitical battle over global economic dominance. \u201cOne of the concerns in the world at the moment is how much reliance there is on America,\u201d he said. <\/p>\n\n\n\n

\u201cThat\u2019s why the BRICS nations and others are looking at other currencies to almost stop America from being this global superpower which we all rely on.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"

Experts warn that South Africa could face another major economic disaster if it were ever cut off from the SWIFT global payment system.\u00a0<\/p>\n","protected":false},"author":92,"featured_media":825249,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[21743,16796,23501,21912,21648],"class_list":["post-837142","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-aluma-capital","tag-future-forex","tag-swift","tag-the-south-african-reserve-bank-sarb","tag-us-president-donald-trump"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=837142"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837142\/revisions"}],"predecessor-version":[{"id":837166,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837142\/revisions\/837166"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/825249"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=837142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=837142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=837142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}