Cape Times 2025-04-24

CONSUMERS reliant on credit may have to endure an extended period of restrictive monetary policy before the South African Reserve Bank (Sarb) considers cutting interest rates later this year, despite recent data showing inflation has plummeted to its lowest level in nearly five years. Data from Statistics South Africa (Stats SA) on Wednesday showed that inflation surprised on the downside and cooled for the first time in five months on the back of lower fuel and education. Stats SA said the headline consumer price inflation (CPI) fell sharply by 0.5 percentage points to 2.7% in March from 3.2% in February, mainly on account of food and non-alcoholic beverages and fuel prices. This better-than-expected inflation print marked the lowest reading since June 2020, falling below the lower bound of the Sarb’s…

South African fund managers are preferring a high gold positioning as the country’s economic growth outlook and confidence in reforms dim, Bank of America (BofA) data showed on Wednesday. Confidence in South Africa’s economic growth prospects has been dimming on the back of disagreements within the government of national unity (GNU). Geopolitical risks were also weighing in as the US and China tariff wars entrench although President Donald Trump this week hinted at a climb-down. BofA’s latest South Africa Fund Manager Survey nonetheless reflected a “high positioning relative to history in gold, banks and bonds. This comes as a “growth and reform hopes dim” with the top risk being “political shifts” to the left. BofA noted “a net 38% see 'reform slowing' (against peak reading of a net 56% September…

Governance issues remain as PIC sets conditions for public interest to be addressed The Public Investment Corporation (PIC) has accepted Saudi Arabia-based Zahid Group’s $1.3 billion (R23bn) bid for Barloworld Group, but has set conditions to address its public interest concerns around the deal. The Zahid Group has proposed a R120 per share offer, which was a 30% premium on the share price at the time of the offer, but shareholders initially voted against the bid amid claims of governance irregularity, due to the participation of its CEO Dominic Sewela as part of the takeover consortium and claims of lack of transparency in the transaction, and despite the group’s assertion that there were now governance breaches. However, in terms of the standby offer made in February, engagements took place between…

The International Monetary Fund (IMF) has issued a stark warning that over one-third of countries are set to experience an increase in public debt by 2025, compared to the previous year. The concerns arise amidst escalating uncertainties and significant policy shifts that are altering economic and fiscal landscapes globally.. According to the IMF’s Fiscal Monitor report released on Wednesday, these economies collectively represent about 75% of global GDP and included major players— China and the United States—as well as Australia, Brazil, France, Germany, Indonesia, Italy, Mexico, Russia, Saudi Arabia, South Africa, and the United Kingdom. The Fiscal Monitor projects global public debt to increase by 2.8 percentage points this year—more than twice the estimate for 2024—pushing debt levels above 95% of world gross domestic product. Vitor Gaspar, IMF director…

There are concerns that MTN Group may have misled its shareholders about the nature of ongoing terrorism litigation in the United States in the recently published Annual Financial Statements for the year ended 31 December 2024. The Annual Financial Statements names five active legal cases related to the Anti-Terrorism Act (ATA) against MTN Group in US courts, and its Director's Report declares that each of those cases has “been assessed as remote and therefore no contingent liabilities have been disclosed.” The Annual Financial Statements were authorized by the MTN Board of Directors on 17 March 2025. The Chairman of the MTN Board is Mcebisi Jonas, the newly appointed South African Special Envoy to the United States. Professor Jeffrey Breinholt of George Washington University helps to shed light on why the…

Deputy President Paul Mashatile on Wednesday said the 2025 Budget process has instilled important lessons, relating to improving transparency in decision-making processes and that the current budgetary process is not transparent and inclusive enough. The 2025 Budget has brought into sharp focus the government's revenue-raising and expenditure measures after Finance Minister Enoch Godongwana proposed a controversial 0.5 percentage point increase in the value-added tax. Speaking at the 2025 Budget Roundtable discussion, Mashatile said a transparent process was one that allowed for public participation, scrutiny, and informed decision-making, ultimately leading to better resource allocation and improved service delivery to the citizenry. "In fact, the foremost lesson we have learned is that we need to return to the concept of the people's budget, this was advocated by Ben Turok, and Joanamarrie…