{"id":840927,"date":"2025-10-24T13:30:11","date_gmt":"2025-10-24T11:30:11","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=840927"},"modified":"2025-10-24T13:30:11","modified_gmt":"2025-10-24T11:30:11","slug":"disaster-for-south-africa-with-40000-more-jobs-on-the-line","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/840927\/disaster-for-south-africa-with-40000-more-jobs-on-the-line\/","title":{"rendered":"Disaster for South Africa with 40,000 more jobs on the line"},"content":{"rendered":"\n

The South African Reserve Bank (SARB) has warned that the ongoing US tariffs on local exports and the end of the African Growth and Opportunity Act (AGOA) will eat away at already low growth and cost thousands of jobs.<\/p>\n\n\n\n

The central bank noted in its Monetary Policy Review this week that it expects South Africa’s economy to grow moderately in 2025 and 2026, but will not breach above 1.5%.<\/p>\n\n\n\n

The second half of 2025 has been hit by weak fixed investment and the implementation of the Trump administration’s tariffs, meaning the economy is unlikely to grow by more than 1.2% in GDP growth.<\/p>\n\n\n\n

While South Africa has been under the weight of tariffs since April, the first half of the year was only subject to the universal 10% tariff imposed by US President Donald Trump at that time.<\/p>\n\n\n\n

However, in August, Trump announced the implementation of the so-called “reciprocal” tariffs that had been paused for 90 days, leading to a 30% tariff on South Africa kicking in from 7 August.<\/p>\n\n\n\n

Economists are generally split on the impact of the tariffs, noting that the economy didn’t really suffer too badly from them in August and September.<\/p>\n\n\n\n

There is a view that the South African economy is more resilient than many think, with GDP growth estimations stretching as high as 1.5% or even 1.6% for the year.<\/p>\n\n\n\n

Despite this, there are concerns that the true impact of the tariffs will only feed through to economic data after a six-month delay, which means the full picture will only be made clear in Q1 2026 data.<\/p>\n\n\n\n

As a result, growth projections for 2026 have taken a hit, with both the SARB and the International Monetary Fund coming in significantly lower than economists’ expectations.<\/p>\n\n\n\n

The IMF lowered its 2026 GDP projections to just 1.2% because of the tariffs, while the SARB has kept its rate at a relatively muted 1.4%.<\/p>\n\n\n\n

The US is South Africa\u2019s third-largest export market for vehicles and automotive parts, with shipments of R35 billion in 2024.<\/p>\n\n\n\n

\u201cThe 25% tariff levied on South Africa\u2019s auto and parts exports is higher than that for most competitors and will sharply reduce South Africa\u2019s competitiveness in the US market, threatening output and jobs in a sector that anchors the broader manufacturing base,\u201d the central bank said.<\/p>\n\n\n\n

AGOA, going, gone<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

The other big sticking point for South Africa is the end of AGOA, which officially lapsed at the end of September 2025.<\/p>\n\n\n\n

While there have been reports that the Trump administration is considering extending the Act for another year, this has not been confirmed due to the ongoing shutdown of the US government.<\/p>\n\n\n\n

Even if the AGOA were to be extended by another year, there is no guarantee that South Africa would remain eligible and included.<\/p>\n\n\n\n

South Africa’s Minister of International Relations and Cooperation, Ronald Lamola, said that ongoing bilateral trade talks between the US and South Africa over the tariffs and AGOA were “positive”.<\/p>\n\n\n\n

However, there has been a frank admission from the South African government that policy issues like Black Economic Empowerment and Land Expropriation have stood out in the talks.<\/p>\n\n\n\n

The ANC-led Government of National Unity has no intention of backing down or changing tack on these policies.<\/p>\n\n\n\n

Ultimately, however, the Reserve Bank warned that these factors could potentially cut South Africa’s growth prospects by 0.4 percentage points in 2026 and lead to 40,000 job losses, relative to its current baseline.<\/p>\n\n\n\n

South Africa is already grappling with a severe unemployment crisis.<\/p>\n\n\n\n

Stats SA’s Quarterly Labour Force Survey for the second quarter of the year recorded 140,000 more workers becoming unemployed in the quarter<\/strong><\/a>, with the official unemployment rate ticking up to 33.2%.<\/p>\n\n\n\n

The Quarterly Employment Survey, tracking formal employment, revealed a loss of 230,000 jobs in the quarter.<\/p>\n\n\n\n

Adding to the pain, more than 12 million South Africans want work but cannot find a job. More than 1,000 people have joined the unemployment queue every day for 17 years.<\/p>\n\n\n\n

The SARB stated that South Africa needs to expedite structural reforms to mitigate the economy’s vulnerability to the impending disaster.<\/p>\n\n\n\n

Structural reforms could boost productivity, mitigating the loss of export competitiveness, and diversifying export markets and strengthening existing trade partnerships could help counter the US tariffs.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Reserve Bank warns that the ongoing US tariffs on local exports and the end of AGOA will eat away at already low growth and cost thousands more jobs in the coming months.<\/p>\n","protected":false},"author":10,"featured_media":838914,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[18336,3619,3281],"class_list":["post-840927","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-agoa","tag-sarb","tag-tariffs"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840927","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\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=840927"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840927\/revisions"}],"predecessor-version":[{"id":840938,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840927\/revisions\/840938"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/838914"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=840927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=840927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=840927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}