Alarm over rising debt costs
CENTURION - Concerns linger about the rising national debt, with 22 cents of every rand servicing interest payments.
WATCH | Budget 3.0 | Civil society demand more from budget
While the infrastructure allocation in Budget 3.0 has been praised many are questioning whether the promised projects will ever be delivered.
The CEO of the Black Business Council, Kganki Matabane spoke to eNCA.
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IOL News
43 minutes ago
- IOL News
BBBEE policies vital for South Africa's economic transformation
President Cyril Ramaphosa has once again reaffirmed the country's commitment to defending its BBBEE laws as the only way to realise economic inclusion. Image: ANC/X South Africa's Broad-based Black Economic Empowerment (BBBEE) policies are here to stay. These were the words of President Cyril Ramaphosa who once again re-affirmed the country's affirmative action policies as key to economic transformation and inclusion. This comes as the DA among others have recently voiced their opposition to the country's economic policies. Ramaphosa and Minister of International Relations, Ronald Lamola during their recent address before the Black Business Council summit, affirmed the current legislative framework. In his newsletter on Monday, Ramaphosa indicated that the country's economy will not succeed without the current policies, adding that now is not the time to back-track on these policies as they are the cornerstone of economic inclusion and the much-needed economic growth as enshrined in the constitution and the Freedom Charter. "Our Constitution reflects the promise we made to one another and to future generations to redress the injustices of our past and realise the full potential of our country. For this reason, we reaffirm that broad-based black economic empowerment is not just a policy choice but a constitutional imperative. "In recent months, the world has entered what many now term a 'poly-crisis' where global conflict, economic stagnation, mistrust in institutions and environmental degradation are challenging even the most resilient of nations." Ramaphosa said now is not the time to abandon the measures that have been put in place to drive transformation. "To the contrary, it is the time to move forward with greater purpose and raise our ambition. Since 1994 we have built a robust legislative framework to advance the transformation of our economy, anchored in the Broad-Based Black Economic Empowerment Act and the Employment Equity Act. The progress we have made is undeniable," he said. In his address to the Black Business Council summit on Thursday, Lamola encouraged black entrepreneurs to take a firm stand in the country's ailing economy. "In the context of our country, inclusive growth has a broader meaning, it must mean the inclusion of black entrepreneurs in the mainstream of our economy and into the South African business playing a role in the world. This is a constitutional imperative. Further to the above small businesses have a key role to play, exchange program and collaboration becomes key," Lamola said. Despite the DA saying the BBBEE laws have not worked, Ramaphosa indicated through legislative frameworks such as the BBBEE policies and other interventions, the country has realised and seen real changes in ownership patterns and more businesses owned by women. "We have seen changes in management control, enterprise development and skills development. According to Statistics SA, between 2006 and 2023, black African households experienced real income growth of 46%, coloured households of 29% and Indian households of 19%. "Despite this progress, the average income of white households is still nearly five times higher than that of black African households. This is the gulf we must close through deliberate and sustained efforts to expand opportunity. Transformation is not a favour. It is a necessity," he added.
Daily Maverick
11 hours ago
- Daily Maverick
South Africa's SMMEs are flying blind in a changing global order
Small businesses are yet again expected to absorb the shocks of stalling growth, economic policy and diplomacy. Small businesses are expected to keep the lights on, even as South Africa stumbles through an increasingly volatile global and domestic economic environment. While a 25 basis point rate cut at month end offered some respite, it's hardly the lifeline small, medium and micro enterprises (SMMEs) need, said Miguel da Silva, executive of business banking at TymeBank in the bank's SMME forecast for June. 'Some diminishing pressure on the cost of credit' followed the South African Reserve Bank's cut, Da Silva said. Yet, he said 'the economy needs every bit of help it can get'. VAT relief with a fuel levy sting The National Treasury's decision to hold VAT steady at 15% provided some short-term relief to cash-strapped SMMEs. But the olive branch came with a thorn. As of 4 June, petrol and diesel prices jumped by 16c and 15c per litre respectively. 'With many small businesses already operating on razor-thin margins, this 16c increase will likely be passed on to consumers, potentially dampening demand in an already constrained market,' Da Silva said. This adaptation to the Budget showcases the government's strained fiscal position. In a podcast discussion on Budget 3.0, Stanlib chief economist Kevin Lings pointed out that until South Africa lifts GDP growth above 3%, pressure on public finances will persist. 'The negative revenue impact from backtracking on the VAT increases proposed in the previous version of the Budget, as well as the weaker economic growth trajectory, is counteracted… by a combination of revenue and spending adjustments,' explained Dr Elna Moolman, Standard Bank Group head of South African macroeconomic research. 'The expenditure changes are dominated by scaling back some of the new spending proposed in the previous versions of the Budget, while the revenue adjustments include both the reversal of some of the tax relief previously proposed… and unspecified future tax hikes.' The Budget foreshadows a pivot to removing the regulatory burden on businesses. Though, as Da Silva noted, no specific SME-support programmes, funding initiatives or targeted relief measures have emerged. Q1 data highlights on the scale of struggle The economic scoreboard from Q1 depicts an economy in stagnation: GDP grew by just 0.1% in Q1 2025, with agriculture (+15.8%) the only area showing growth. The National Treasury revised 2025 growth expectations downward from 1.6%, from 1.8%. Official unemployment rose to 32.9%, from 31.9%, which translates to a decrease of 54,000 in the labour force. Youth unemployment increased to 46.1% from 44.6% in the first quarter of 2024. While the SME SA Funding Summit 2025 on Thursday, 12 June is expected to explore access to finance, Da Silva stressed that a functioning, reliable environment matters more. How does this affect you? No real relief for entrepreneurs: if you're running a small business, don't hold your breath for targeted funding or tax breaks. Government promises of support remain vague. Price volatility on imports and exports: If Agoa collapses or BRICS moves away from the dollar, expect price changes in imported goods and export delays. Policy fog = business risk: If you're a customer, supplier or entrepreneur, inconsistent policy and mixed messages from government and diplomats create risk, which translates into cautious spending, higher borrowing costs and business hesitancy. Agoa and the diplomatic see-saw South Africa's trade diplomacy with the US remains complicated, but functional for now. Trade Minister Parks Tau and Agriculture Minister John Steenhuisen delivered a new framework to US Trade Representative Jamieson Greer on 19 May, laying out a new bilateral trade proposal. 'We met and had a very cordial and constructive meeting with Ambassador Greer… We had a very open and frank exchange about how we can ensure mutually beneficial trade between South Africa and the United States of America,' said Steenhuisen. He further noted that 'the importance of both markets for each other, and obviously a lot of emphasis from the American side [on] wanting to rebalance some of the trade… and from our side, wanting to retain market access'. With Agoa set to expire in September 2025, a renewal is looking uncertain. Da Silva said that 'the complex challenge of either finding alternative markets or restructuring their operations' looms large for SMME suppliers in US markets. 'While the US is not our largest trading partner, it is an important one, with 8% of our exports destined for its shores,' said Maarten Ackerman, chief economist at Citadel. 'Of that 8%, a third is excluded from tariffs, but citrus exporters are likely to be hardest hit.' BRICS Summit brings new questions Then there's the BRICS Summit in Brazil in early July, where stakeholders are expected to discuss mechanisms to alleviate dependency on the dollar. 'For SMEs, particularly those in export-oriented sectors, this diplomatic tightrope walk translates into very real business planning challenges,' Da Silva explained. Navigating dual allegiances between BRICS and the West 'requires SMEs to develop strategies that can withstand diplomatic volatility while capitalising on emerging opportunities', Da Silva said. DM
eNCA
2 days ago
- eNCA
Founders' Legacy Breaking barriers through fashion and design
JOHANNESBURG - Fashion and style have defined many an era, changed perspectives on what works and what doesn't and of course broken many barriers. Founders Legacy puts the spotlight on one of the entrepreneurial innovators of the fashion sector. Donna Lee Wentzel the founder of Donna's Couture joined eNCA's Rofhiwa Madzena in the legacy seat.
