
Here are economic and geopolitical factors to affect SMEs
Small and medium enterprises (SMEs) should brace for impact as some economic and geopolitical factors will lead to unfavourable outcomes, while some will offer relief.
As things stand, a 30% US tariff will be implemented on 7 August 2025 on exports, which is not very good news for businesses.
But on the brighter side, the South African Reserve Bank (SARB) Monetary Policy Committee (MPC) has decided to cut interest rates, which can offer some relief to small businesses.
Tariffs
Miguel da Silva, Group Executive: Business Banking at TymeBank, said that with the upcoming implementation of the US tariffs, the South African government is making plans on how to mitigate the fallout.
'The South African Government has 'pulled out all the stops' during a flurry of trade delegations and counteroffers but is now making arrangements to deal with the expected fallout, including the establishment of an export-support desk that will provide updates and advisory services to exporters, and a rumoured package of Treasury-backed incentives for some affected sectors.'
He, however, notes that the tariffs that matter are subject to change. In April, the Trump administration announced a 31% tariff on South Africa, which was then suddenly dropped to 10%.
ALSO READ: US tariff of 30%: Rand weakest in 3 months, thousands of jobs in danger
Sarb cuts interest rate
The Reserve Bank Governor Lesetja Kganyago announced a 25-basis-point lowering of the interest rate on 31 July, and that the Sarb would be revising its inflation target to 3% from its previous 3–6% range.
'The revised target makes it unlikely that we will see any more interest-rate cuts this year, meaning borrowing will remain more expensive than many households and businesses might have hoped.
'Kganyago emphasised that the SARB expected the new target to enhance credibility with global investors, making borrowing for the state less expensive, and protect the rand (which has fallen to a several-month low nonetheless).'
The release of the Consumer Price Index (CPI) inflation data from Statistics South Africa will give SMEs some guidance on input-cost planning in this tightening market.
Uncertainty on business conditions
He highlighted that SMEs will receive useful guidance from the economic indicators set to be released during August.
The S&P Global South Africa PMI serves as a single-figure snapshot of operating conditions in the private-sector economy.
While the recent Purchasing Managers Index (PMI) performance showed improvement to 50.8 in July 2025, marking the first growth since November 2024, and indicating the fastest business activity expansion in four years.
'The Bureau for Economic Research conducts its quarterly business confidence survey in mid-August, with questionnaires distributed to manufacturing, retail, wholesale, and construction sectors.
'Results, typically published in early September, will influence Q4 2025 business planning. Current confidence levels fell to 40 points in Q2 2025 from 45 points in Q1, remaining below the long-term average of 43 points, suggesting cautious SME sentiment, and who's to blame them.'
ALSO READ: SMEs need to brace for reduced orders due to a 30% US tariff
Global SME Ministerial Meeting
Deputy President Paul Mashatile emphasised the importance of the African Continental Free Trade Area Agreement to the continent's entrepreneurial landscape during the Global SME Ministerial Meeting on 24 July 2025 in Boksburg.
The meeting had representatives and Ministers from more than 100 countries to address the issues hindering SMEs from reaching their full potential under the theme 'Navigating New Business Frontiers'.
However, da Silva noted that Mashatile did not mention any concrete measures the government is taking to support SMEs, apart from the R100 Billion Transformation Fund touted by Trade, Industry and Competition Minister Parks Tau.
GNU passes a national budget
'In some good news, the government of national unity (GNU) continues to make its way unsteadily forward, with the National Council of Provinces effectively passing the 2025 National Budget.
'All GNU partners approved the Appropriation Bill that allowed the budget process to be concluded. When tough conditions prompt pragmatic alignment amongst our political leaders, at least there's some room for optimism,' he added.
NOW READ: Repo rate cut no help for consumers on brink of financial disaster
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Daily Maverick
27 minutes ago
- Daily Maverick
The JSE displays an unhealthy obsession with secrecy
When a company lost big on the stock market in 2020 and suspected possible market manipulation, it attempted to get information from the Johannesburg Stock Exchange. The JSE stonewalled them, baldly citing privacy and commercial confidentiality issues. This story of one company fighting to access information from a South African public body is playing out every day, across all spheres of government, and illustrates a culture of secrecy in our public administration. Five years ago, a small company, Inhlanhla Ventures, was placed in a difficult financial position. It had been investing in shares on the stock market through a broker. As part of their agreement, the broker would provide credit to Inhlanhla to invest – and then hold shares as security for those loans. However, if the value of any shares held as security dropped below a certain percentage, the broker was entitled to demand additional security or repayment of the debt. If Inhlanhla failed to comply, the broker would be entitled to take ownership of the shares held by it in settlement of Inhlanhla's debt. During the first quarter of 2020, the broker at that point held all the shares owned by Inhlanhla as security. A substantial part consisted of shares in enX Group Limited, a public company listed on the JSE. In May 2020, as a result of an unexpected, rapid and substantial decline in the price of the shares in the Inhlanhla portfolio, particularly the enX share price, Inhlanhla realised that the broker would be entitled to foreclose on the bulk of Inhlanhla's securities. Given the decline of the enX shares, which dropped from 700c per share at the beginning of April to as low as 320c per share on 14 May 2020, Inhlanhla was left with little option other than to relinquish its portfolio to the broker. However, a couple of days after the broker assumed ownership of those shares, the share price rose significantly, meaning the broker benefited handsomely. A rat? Inhlanhla thought it smelled a rat. By examining the trade in enX shares between April and June 2020, Inhlanhla believed that there were grounds to suspect market manipulation. If that was the case, Inhlanhla might be entitled to restitution for the losses it suffered. But it did not have access to the details of all the trades made in respect of the shares, and so it could not get conclusive proof to back up its suspicions. And so, Inhlanhla filed a request for access to information on the identities of the buyers and sellers of the shares and the sale values with the Johannesburg Stock Exchange (JSE) under the Promotion of Access to Information Act (Paia). They also narrowed down their focus to the key period from 3 May to 19 May 2020. Public body The JSE is a public body and gets its powers and responsibilities from the Financial Markets Act (FMA). It – like all public and private bodies – is bound by Paia and so must disclose any information requested unless there is a legitimate ground (as set out in the legislation) for it to refuse the request. The JSE refused the Paia request from Inhlanhla, stating baldly that the information sought contained personal, confidential or commercial information and it was prohibited by the FMA and Paia from disclosing such information. As we have previously explained, the Information Regulator (IR) is a new body to which someone unsatisfied with a refusal of their Paia request can file a complaint. Believing that the JSE was incorrect in refusing their request, Inhlanhla approached the regulator. The Information Regulator investigates The IR issued an investigation report, finding that the JSE had no justification in refusing the request, ordering it to disclose the requested information to Inhlanhla. However, this order remains preliminary and Inhlanhla is waiting for a final decision from the IR's enforcement committee. In any case, lawyers acting for the JSE have already written to Inhlanhla, putting the company on notice that if the regulator rules in Inhlanhla's favour, the JSE will go to court to review that decision. This is why this story of one company seeking to get information from one public body in 2020 is relevant. The experience of Inhlanhla is just one example that illustrates South Africa's broken access to information system and how a culture of secrecy within our powerful institutions operates to stymie accountability. Similar stories happen every day, all over the country, with all sorts of public bodies. Municipalities, national government departments and state-owned entities all regularly refuse Paia requests, often based on a misguided interpretation of the law. Although the IR provides a useful mechanism before having to go to court, the delays in accessing the information sought are often ruinous or make the information eventually disclosed irrelevant because of the passage of time. The JSE's trite response The reasons given by the JSE in its refusal of the Inhlanhla request are also reasons we see repeatedly. One common refrain we hear from public bodies is that they cannot disclose the information because doing so would violate a statutory obligation they hold to protect personal, private or confidential information. Often, the public body refers to the Protection of Personal Information Act. Here, the JSE also said that the FMA prevented it from disclosing any confidential information. But this must be a misreading of the law, as Parliament could not have intended the FMA to act as a justification to refuse Paia requests. And, in fact, Parliament did not exclude Paia from the obligations under the FMA. The Act states that confidential information cannot be disclosed 'unless disclosure is required or permitted in terms of a law or court order'. Paia is one of those laws. The IR, in its investigation report, confirmed that one of the objectives of Paia is to 'promote transparency, accountability and effective governance'. It is a vital cog in the constitutional framework which enables citizens to hold powerful institutions, government bodies and individuals to account. The JSE's reliance on the FMA is a betrayal of these principles. The JSE's stance is particularly galling, because as the IR's investigation report points out, its claims of blanket confidentiality on the details of who trades shares in listed companies, exactly when they do it, and how much they pay, go to the heart of a transparent market – especially when there are claims of market manipulation. As the IR report notes, our courts have emphasised the non-private nature of how companies conduct their affairs, especially when they involve publicly traded securities. The FMA, the regulator said, also supports this principle by promoting transparency in the financial markets. Early in South Africa's constitutional democracy, the Constitutional Court, in Bernstein v Bester, explained that a company's business was not a purely private matter. The Supreme Court of Appeal, in Nova Property Holdings v Cobbett, confirmed that this principle extended to companies' securities registers, which were 'not inherently private'. The IR investigation found that disclosure of information in this case was not unreasonable, as it pertained to market activities conducted under the regulatory oversight of the JSE. Commercial harm? The JSE also stated that it could not provide the information that Inhlanhla sought because to do so would violate the mandatory protection of commercial information of a third party. This is also an oft-seen tactic – the bald claim that commercial harm would result from the disclosure of the information. The IR stressed that a public body cannot make this claim as a 'mere assertion' and had to provide evidence of how disclosure would actually harm the relevant third party. But, despite the multiple court judgments explaining that disclosure of information must be the default and that access to information should be granted unless valid, specific and justified grounds for its refusal exist, public bodies like the JSE continue to issue bald refusals – and so the IR investigation rejected this claim, too. The JSE also claimed it owed a duty of confidentiality to third parties and so could refuse disclosure in terms of Paia. However, the JSE failed to seek third-party consent (as it was obliged to) and also failed to identify any agreement with third parties which provided such an undertaking of confidentiality – again, leading the IR investigator to reject the JSE's reliance on the ground of refusal. Public interest override Paia provides that, notwithstanding other prohibitions, the public body must assess whether the disclosure of the records would reveal evidence of a substantial contravention of, or failure to comply with, the law and whether the public interest in the disclosure of the record clearly outweighs the harm contemplated in the grounds of refusal. The IR investigation noted that Inhlanhla had furnished the JSE with an analysis of the Traded enX Shares over the period 1 April 2020 to 30 June 2020 and that it had clearly invoked concerns regarding 'substantial contravention of the law', in the form of market manipulation. The IR took the view that the JSE had simply not properly engaged in the balancing exercise required by Paia to determine whether the public interest override would apply, and found that mandatory disclosure in the public interest was relevant or applicable under the circumstances. Where to from here? As mentioned earlier, the IR enforcement committee still needs to review and make a determination on the investigator's preliminary report. After that, either party can take the IR decision to court – as the JSE has already indicated it will do if it is ordered to make the requested disclosures. As the Inhlanhla story demonstrates, the process to challenge a refusal is so onerous and so lengthy that often someone seeking access to information is forced to give up. It's hard not to think that the public bodies know this and so know that – despite their misreading of the law and judicial precedent – their refusals of the public's Paia requests will probably go unchallenged. With public bodies defaulting to secrecy rather than transparency, and our access to information mechanisms taking years to resolve complaints, is it any wonder that we're in an accountability vacuum in South Africa? DM


Eyewitness News
7 hours ago
- Eyewitness News
Brazil seeks WTO relief against Trump tariffs: government
BRASILIA - Brazil on Wednesday approached the World Trade Organization for relief against trade tariffs imposed by US President Donald Trump, sources in the government of Luiz Inacio Lula da Silva told AFP. The 50-percent tariff on several Brazilian goods went into force on Wednesday over what Trump has termed a "witch hunt" against his far-right ally Jair Bolsonaro, the former president on trial for plotting a coup. The sources said Brazil's government had filed a request for consultations with the US mission to the WTO, the first formal step in the trade body's dispute settlement process. Trump's latest tariff salvo raised duties on Brazil from 10 percent to 50 percent for key exports including coffee, beef and sugar. Broad exemptions on products such as orange juice and civil aircraft somewhat softened the blow. Brazil's Vice President Geraldo Alckmin previously told journalists the new tariff would apply to about 36 percent of the country's exports to the United States. In an executive order last week, the Trump administration lashed out at Brazilian officials for "unjustified criminal charges" against Bolsonaro, on trial for allegedly plotting a coup to wrest back power after losing the 2022 presidential elections to Lula. Trump's order, which also criticized Brazil's digital regulation, charged that the Lula government's recent policies and actions threatened the US economy, national security, and foreign policy.

IOL News
7 hours ago
- IOL News
South Africa faces economic repercussions from new US tariffs
The Portfolio Committee on Trade, Industry and Competition has expressed deep concern over the impending 30% import tariff that the United States plans to impose on certain South African exports, effective from August 7. Image: IOL Graphics/Se-Anne Rall The Portfolio Committee on Trade, Industry and Competition has expressed deep concern over the impending 30% import tariff that the United States plans to impose on certain South African exports, effective from August 7. This significant development has raised red flags about the potential repercussions for key sectors of the South African economy. During a recent meeting in June, the committee engaged with the Department of Trade, Industry and Competition (DTIC) to assess the state of South Africa's trading relationship with the US, as well as with other international partners. The newly announced US tariffs, which will affect multiple countries alongside South Africa, have serious implications for strategic sectors such as automotive, agriculture—particularly citrus—and steel, all integral to South Africa's economic fabric and job market. Historically, South Africa has enjoyed a robust trade relationship with the United States, which stands as the country's second-largest trading partner. In 2024, South African exports to the US accounted for approximately 8% of the nation's total global exports, valued at around R156.6 billion. This export composition is telling, with around 43% comprising manufactured products, predominantly autos and vehicle components, alongside mining commodities (50%) and agricultural goods (7%). Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ As the largest importer of US goods in sub-Saharan Africa, the South African economy has been bolstered by mutual trade benefits, generating a trade surplus with imports valued at about R120.2 billion in 2024. This partnership has fostered an environment where over 600 US companies, including prominent names like Ford, Coca-Cola, and Google, operate in South Africa, contributing to job creation on both sides: 132,000 jobs in South Africa and 7,000 in the US from South African corporations. In light of the new tariffs, the committee has raised alarms regarding the direct impact on the competitiveness of South African exports. The additional tariff will likely inflate prices for South African goods in the US market, potentially eroding demand and disrupting established value chains. Such changes could lead to declines in local production and significant job losses if alternative markets cannot be secured. There is also concern over how the tariffs may alter the current composition of South African exports. With approximately 43% of South African goods destined for the US being manufactured products, any reductions in this sector could pose severe challenges, especially when compared to the 38.7% of global exports that consist of manufactured goods. To mitigate these risks, South Africa recently introduced the 'Butterfly Strategy,' aimed at fostering industrialisation and diversifying trade partnerships. Key components of this strategy include a focus on product and market diversification, enhanced trade negotiations, and streamlined protocols to adapt to global challenges. The committee, alongside the government, urges renewed negotiations with the US, emphasising the crucial need for a viable trade and investment agreement to tackle ongoing issues.