South Africa targets R700bn investment pipeline to tackle economic challenges
Image: Supplied
Banele Ginidza
Petrochemical giant Sasol is engaging with a team from the European Union (EU) to explore the production of clean aviation fuel in a bid to address impending trade challenges posed by Carbon Border Adjustment Mechanism (CBAM) taxes on South African exports.
Minister for Trade, Industry and Competition, Parks Tau, highlighted this strategic collaboration during his Budget Vote on Friday, emphasising the government's proactive approach to mitigate the potential impact of CBAM.
CBAM has raised concerns in many sectors, being perceived not only as an environmental mechanism but also as a barrier to trade.
Tau stated that the South African government was actively negotiating with the EU, alongside garnering support at global platforms such as the World Trade Organisation (WTO), to underscore the importance of treating CBAM as a broader trade issue that requires comprehensive dialogue.
He said this was part of plans including meticulously curating a R700 billion pipeline of credible, investable projects designed to revitalise key sectors in South Africa.
This initiative spans critical sectors from 25GW of transformative energy projects worth R339bn – solar parks, wind farms, battery storage, gas-to-power – alongside upgrades in transport, logistics, manufacturing, agro-processing, and digital infrastructure.
"But we haven't stopped there and wallowed in self pity. We have said let's engage the EU and ensure that we are able to find solutions," Tau said.
"We were at a Summit with the EU at which we agreed on what is developing as a model trade agreement called the Clean Trade and Investment Partnership. They committed to an intial R90bn to facilitate clean trade and investment between our respective participant countries."
Tau said the agreement opens vital duty-free access for exports in key sectors like dairy for the local production of Amarula, sustainable aviation fuel, new energy vehicles, green hydrogen, and battery components, accelerating South Africa's industrial decarbonisation.
Further supporting South Africa's economic landscape, Patel revealed that the Department of Trade, Industry and Competition (the dtic) has proposed a normalisation of trade relations with the United States.
The plan involves securing gas imports from the US—essential for mitigating the domestic 'gas cliff'—in exchange for concessions in the automotive and steel industries, as well as agreements on seasonal produce.
"We are currently in the process of finalising the details of what constitutes that partnership. But a particularly important issue in that regard is a move away from a pit to port approach where the West and now even the East will essentially come [and] get into our minds, get products, get minerals, get them to the port and out of Africa," Tau said.
"We said it must be premised on industrialisation, co creation and co-development." Tau said.
He said to stop the "bleeding" in the ferrochrome and automotive sectors, government had to bail out Arcelormittal South Africa (AMSA), not necessarily as an individual company but for the sustainability of the downstream sector.
"In terms of the transition that is happening in the sector, we are experiencing problems. We have seen for example Mercedez Benz' decision based on that there is lower demand in two areas. There is a reduction in demand for sedans in favour of SUVs," Tau said.
"Secondly, there is reduction in demand for internal combustion engines vehicles. Because we now want to produce in a different location hybrid vehicles, we have to adjust to that reality, we have seen the impact in component manufacturers."
He added that negotiations were continuing with Goodyear Tyres to "stem the tide" after the tyre manufacturing firm announced that it was closing its plant in Kariega as part of a restructuring strategy affecting the Europe, Middle East, and Africa (EMEA) region.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Eyewitness News
an hour ago
- Eyewitness News
Africa's largest pay TV operator facing fine for Nigeria data breach
LAGOS, NIGERIA - Regulators have levied a 766 million naira fine (about $500,000) on the Nigerian subsidiary of Africa's biggest subscription television operator for a "patently intrusive" privacy breach. The Nigeria Data Protection Commission (NDPC) on Sunday accused MultiChoice Nigeria, the Nigerian outpost of South African cable TV provider MultiChoice, of violating data protection laws. Babatunde Bamgboye, who heads the NDPC's enforcement unit, said the commission began its investigation of the breach in the second quarter of 2024 after the company was suspected of carrying out an "illegal cross-border transfer of personal data of Nigerians". "NDPC found, among others, that MultiChoice violated the data privacy rights of subscribers and their friends who are not necessarily subscribers," Bamgboye said in a statement. "The Commission also found that MultiChoice carries out illegal cross-border transfer of personal data relating to data subjects in Nigeria." MultiChoice did not immediately respond to AFP's request for comment. This is not the first time Nigeria has clamped down on the company. Nigeria's Federal Inland Revenue Service (FIRS) froze the company's account in 2022 and asked it to pay a 1.8 trillion naira ($1.27 billion) tax claim and a $342 million claim for value-added taxes. MultiChoice began operating in Nigeria in 1993 and has more than 2,000 employees in the country. It has lost about 1.4 million Nigerian subscribers in the last two years as the west African country contends with its worst economic crisis in decades.
IOL News
an hour ago
- IOL News
Rand weakens as Trump extends tariffs on emerging economies, escalating trade tensions
Trump also reiterated previous warnings of imposing tariffs of up to 100% on BRICS nations should they abandon the US dollar in bilateral trade, and further warned other countries against joining the alliance. Image: Mauro PIMENTEL/AFP The rand weakened to its lowest in nearly two weeks against the major currencies on Monday as global risk was seen to have escalated following US President Donald Trump's tariff threat. On Sunday, Trump announced an extension to the tariff deadline, pushing it to the beginning of August while imposing an additional 10% tariff with 'no exceptions' on countries aligning with the policies of BRICS—a bloc of emerging economies comprising Brazil, Russia, India, China, and South Africa. Trump also reiterated previous warnings of imposing tariffs of up to 100% on BRICS nations should they abandon the US dollar in bilateral trade, and further warned other countries against joining the alliance. The expanded BRICS bloc now encompasses 11 countries, representing 43% of the global population, 32% of the world's land area, and approximately 35% of global GDP, which makes these tariffs even more impactful. On Monday, BRICS currencies, along with emerging markets, came under pressure. The rand weakened by 1.15% to R17.79 against the US dollar, 0.9% to R20.90 against the euro, and 0.9% to R24.20 against the British pound, marking its lowest level since June 27. According to Investec's chief economist, Annabel Bishop, the rand's decline was attributed to rising uncertainty surrounding global trade. She stated that after briefly nearing the key resistance level of R17.50 against the US dollar last week due to the dollar's weakness, the renewed tariff threats compelled a rebound of the dollar, thereby pulling the rand lower. 'The ongoing uncertainties around global trade, with high levels of protectionism (including tariffs) negatively impacting globalisation and global growth, has caused some market concerns, seeing US dollar strength on some safe-haven purchases,' Bishop said. 'The additional 10% BRICS tariffs would add further drag to SA's export competitiveness, and this has added to rand weakness, with the universal extension to early August not currently expected to see SA return to prior Agoa status.' The impact of the tariffs is expected to weigh heavily on South Africa's export competitiveness. The rand's further depreciation comes despite prior efforts by South Africa to negotiate better terms with the Trump administration over trade relations. In fact, the country had already faced a 10% tariff along with an additional 30% duty on certain imports prior to a temporary pause for negotiations. Trade, Industry and Competition Minister, Parks Tau, recently said there was still room for engagement with the US regarding trade protectionism. South Africa has submitted a draft Framework Agreement to address American concerns over non-tariff barriers, as well as trade deficits, but has yet to receive a response. This Framework aims to resolve long-standing access issues while promoting investments on both sides. Nigel Green, CEO of global financial advisory deVere Group, said Trump's fresh threat to slap an additional 10% tariff on any country backing the BRICS alliance was accelerating a decisive shift among global investors — one that's moving capital, attention and confidence away from the US. 'Tariffs were once a bargaining tool. Now they're a permanent threat. That changes how markets view American reliability. We're seeing a structural reassessment of US exposure,' Green said. 'The message from BRICS is to build around the US, not with it. That's a direct consequence of Trump's strategy, and it's setting the stage for a less US-centric world economy.' Meanwhile, the BRICS Leaders Declaration on Sunday said the multilateral trading system has long been at a crossroads. It said the proliferation of trade-restrictive actions, whether in the form of indiscriminate rising of tariffs and non-tariff measures, or protectionism under the guise of environmental objectives, threatened to further reduce global trade, disrupt global supply chains, and introduce uncertainty into international economic and trade activities, potentially exacerbating existing economic disparities and affecting prospects for global economic development. 'We voice serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with World Trade Organisation rules (WTO),' read the Declaration. 'In this context, we reiterate our support for the rules-based, open, transparent, fair, inclusive, equitable, non-discriminatory, consensus-based multilateral trading system with the WTO at its core, with special and differential treatment for its developing members.' BUSINESS REPORT
The South African
2 hours ago
- The South African
MaMkhize amid Mkhwanazi bombshells: 'Let my silence speak volumes'
MaMkhize – real name Shauwn Mkhize – has seemingly responded to being name-dropped in a series of bombshells made by KwaZulu-Natal Police Commissioner Nhlanhla Mkhwanazi and now Chairperson of the Portfolio Committee on Police, Ian Cameron. This relates to allegations that Minister of Police Senzo Mchunu has ties to criminal gangs and has meddled in police investigations into politically motivated murders. In 2023, MaMkhize – a reality TV star and businesswoman – made headlines for partying with controversial then-police minister Bheki Cele, who has since retired. A day after KZN Police Commissioner Nhlanhla Mkhwanazi's bombshell media briefing about Minister of Police Senzo Mchunu, Ian Cameron dropped more damning allegations relating to the minister and his affiliations. The Portfolio Committee on Police chairperson claimed that SARS and police had found 40 firearms in a house raid of MaMkhize's La Lucia home last November. Cameron said in a media briefing on Monday: 'During that raid [of MaMkhize's house], a whole cache of firearms was seized. All of those firearms were registered to a security company belonging to none other than Mr Cat Matlala'. Cameron is referring to mafia businessman Vusimuzi 'Cat' Matlala, who, Mkhwanazi previously claimed, is believed to have benefited from his relationship with Mchunu. Cameron added that all the firearms had been returned to Matlala despire their call for an inquiry. Like MaMkhize, Matlala has been accused of unlawfully acquiring lucrative government tenders, one of which was a R360 million healthcare deal for the SAPS last year. Matlala is currently facing charges of money laundering as well as attempted murder and conspiracy to commit murder based on a 2023 attempted hit on his ex-girlfriend, socialite Tebojo Thobejane. MaMkhize has posted a subtle response to her name trending online amid the drama unfolding between Nhlanhla Mkhwanazi and Senzo Mchunu. 'Let my silence speak volumes', she posted on her Instagram Stories. In recent months, MaMkhize has made headlines over her R40 million SARS tax evasion and the forfeiture and auction of dozens of multi-million rand luxury cars. She has also had her PSL soccer club, Royal AM, sold to pay off her debt. MaMkhize's name topped the trends list after a top SARS official survived an assassination via Instagram: @kwa_mammkhize/ X: @vehicletrackers Last year, MaMkhize's name trended on social media after a SARS official investigating her case escaped an attempted hit. She has also previously been charged with other alleged criminal activity, including fraud, forgery, and bribery. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.
