The Rand has been hit hard by the defunding of federal support by US President Donald J. Trump since Friday 7th of March. Washington has cut all aid to South Africa. However, the American Dollar weakened after data revealed that the U.S economy added fewer jobs than anticipated last month. The Rand was trading at 18.21 against the Dollar, which was approximately 0.3% weaker than its previous close. Earlier on Friday, the Rand had fallen by 1%. This drop ended a streak of four consecutive daily gains for the local currency, but the Rand still appreciated nearly 3% against the Dollar since last Friday’s close as markets processed Trump’s tariff policies. On Monday (10 march), the Rand was trading at R18.33 to the dollar, R23.67 to the pound and R19.86 for the euro. Oil is trading lower now $ 70.03 a barrel.
- Budget at risk: With just 48 hours left before the second attempt to present the Budget in Parliament, the ANC and the DA have yet to reach an agreement on the fiscal framework. There is a strong possibility that the DA will not support the Budget, which could lead to another postponement if the ANC fails to secure backing from other parties, such as the EFF. [News24]
- Heads could roll at Eskom: Electricity and Energy Minister Kgosientsho Ramokgopa expressed disappointment over Eskom’s recent Stage 3 load shedding, stating that there should be consequences for its failures. He plans to resume visits to power stations to address any issues. “Where there has to be casualties, there will be casualties,” said Ramokgopa. [Engineering News]
- NHI concerns: Health Minister Aaron Motsoaledi’s release of the first draft regulations for the National Health Insurance (NHI) Act has faced immediate criticism from stakeholders disappointed that their concerns have not been addressed. [Business Day]
- It is good the Democratic alliance (DA) and the African National Congress (ANC) are still attempting to come to an agreement over the nature of the government’s national budget. The new fiscal agreement will determine the amount of spending by the state that is needed for the country. The Government of National Unity (GNU) needs to figure out how to satisfy the funding of government services while keeping taxes at reasonable rates.
- Resignations at Eskom may be in order. Minister Ramokgopa may be feeling more than disappointment at Eskom’s recent stage 3 loadshedding. Perhaps even a small amount of anger. The Minister during his intended visits to power stations across the country may keep the power Utility Company’s employees on their toes. They may find themselves losing their jobs.
- A review of the NHI Bill was needed. But it is clear more consultation on the matter will be needed. Doctors, civil society and the medical professionals need to have their say in how the bill’s draft regulations are set as regards to patients.
There has been a marginal decrease in the cost of petrol and diesel this week according the South African website.
South Africa’s rand rose to its highest level against the US dollar in nearly three months on Thursday, 6 March. This comes as concerns grow over President Donald Trump’s tariff policies, which are fueling fears of a prolonged global trade war that could harm economic growth and increase inflation. Coupled with a stronger rand in recent days, it spells potential good news for South Africa’s motorists. Below, the latest projections as received by The South African website from the Central Energy Fund (CEF), effective Tuesday, 4 March. If the market conditions were to remain consistent for the remainder of the month – an unlikely scenario with the rand/dollar exchange rate fluctuating and the oil price ever changing – a decrease of 70 cents is expected for petrol 93 octane motorists and a decrease of 83 cents for 95 users.
South Africans should count themselves lucky at this reprieve in the oil price decrease. It is a temporary reprieve given the overreach of Trump’s imposition of trade tariff policies, that could possibly cripple our economy. If Washington follows through with enforcing those tariffs, then the petrol prices could spiral. The lessening of the petrol prices could be reflected in the overall stability of oil producing nations. The Rand being stronger against the dollar and the low oil prices could be an opportunity for the administration of President Cyril Ramaphosa to clean up its act. The country needs to figure out what Trump and his circle of advisors are trying to achieve with their imposition of trade tariffs and limitation of US aid and reach some sort of agreement. If it is possible. Or look for new trading partners.
Article written by:
Yacoob Cassim
Journalist at Radio Al Ansaar
