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Daily Maverick
a day ago
- Business
- Daily Maverick
After the Bell: Who's afraid of losing Agoa?
One of the great risks of the debate around Agoa is that it gives us something else to blame, when we should blame ourselves for our poor economy. And we must remember that it is not true that there is no cost to us from Agoa. One of the most boring discussions I've heard around our economy over the past five years has been posed as 'will we keep Agoa?' I hear it everywhere, even now, when US President Donald Trump has made it clear that he wants to tear up the entire trade rule book. I can understand why we keep hearing about it. There are certain sections of our economy that really benefit from it. Because of Agoa (the African Growth and Opportunity Act), they have been able to grow and employ people. And some of the arguments they can make about why Agoa matters to us are important. Free market access to the US is great for the car industry, and for our farmers. It means they are exporting goods produced here, earning dollars in return and basically importing jobs. People are employed, their kids are kept in good schools. You could argue that the entire community around Daily Maverick journalist Estelle Ellis and the rest of the Baywatch team will be badly hit if it all comes to an end. And that would be true. Farmers, too, had a bumper season exporting to the US in the first quarter of the year. They were able to increase the amount of goods they sent there dramatically in that quarter. When I first heard that, I thought, perhaps, like the Chinese (and I'm sure others), they had been rushing goods into US ports before new tariffs could come into effect. But that amazing agricultural economics guru Wandile Sihlobo told me on The Money Show on Monday night that this is not the case. It happened because our farmers have created a strong demand for their goods. And, like our car industry, we are basically importing jobs. But we should be aware that, despite these very loud and important voices in our national debate, this is not the end of the story. The Brookings Institute estimated nearly 18 months ago that 'In total, a loss of Agoa benefits would lead to a GDP decline of just 0.06%'. To put that into context, our GDP grew by just 0.1% in the first quarter of this year. At the same time, the South African Reserve Bank has generally said that load shedding was costing our GDP 2% every year. So it may matter, but only in the context of our complete inability to take action to grow our own economy. One of the great risks of this debate around Agoa is that it gives us something else to blame, when we should blame ourselves for our poor economy. And we must remember that it is not true that there is no cost to us from Agoa. In fact, a few weeks ago I was almost taken aback when an American investor (one of those wonderful people who travels the world, and is hugely interested and fascinated by it) asked me point-blank: 'Why do you all care so much about Agoa?' He even suggested that actually it went against our interests. This is because of some of the small print. If you look at the text of the Act that passed through the US Congress, the conditions of eligibility are designed to literally create African economies in the US mould. Of course, as we were so often reminded during the Lady R saga, it says that you must 'not engage in activities that undermine United States national security or foreign policy interests'. This is a wonderful stick for the US to beat us with. If it wants, it could define our opposition to Israel's genocidal war on the people of Gaza as 'undermining' US 'foreign policy interests'. To be clear, there is much in Agoa that is good. It mentions that workers must be protected, that there should be political freedom and things like that. But it is still a tool of foreign policy. Yes, Agoa is helping African countries to develop. But it is also a useful instrument of control. Agoa looks finished anyway. In reality, the US system of government appears to be giving Trump whatever he wants. So far, very few Republicans have spoken against his tariff policies. But the markets are speaking. And the fact that the bond markets have forced Trump to basically chicken out has given us the wonderful phrase Taco (Trump always chickens out). So, I do think we need to be less afraid of him. He is slowly being revealed as all bark and very little bite. What we really need to do is to find Americans who lose out if we cannot export to the US. The US citrus industry, for example, needs our oranges to keep the market interested in oranges during their non-growing season. And we should not forget those strange people who drive BMW X3s. The models sold in the US are only made here. And even if they are rubbish cars (who can forget Jeremy Clarkson having to throw the sound guy out of the car to go and push, even now it's still worth watching), there is still a lobby for them in the US. I think we need to stop worrying so much about Agoa.
Daily Maverick
6 days ago
- Business
- Daily Maverick
Young South Africans school the market — JSE Investment Challenge April winners announced
Every year, the Johannesburg Stock Exchange Investment Challenge puts South Africa's sharpest young minds to the test – and every year, a crop of winners rises to the top. The April 2025 results are in and the future of finance is looking bright and, in most cases, still in school uniform. With four risk-flavoured categories to choose from – income, equity, speculator and ETF/ETN (exchange traded notes/exchange traded funds) – each month brings new winners, while the race for the annual crown keeps everyone on their toes. It's the ultimate financial boot camp, minus the push-ups, but with plenty of number crunching. From rural roots to repeat victories Mpumelelo Secondary School, renowned for sweeping all five top positions in the schools' income category last year and repeated victories over the past several years, has once again proven its mettle in 2025. For the month of April, the Mpumelelo team, The Brave Ones, secured first place in the income category with an impressive portfolio growth of R10,139.73. Grade 11 learner, Mthombeni Nokubonga Naomi expressed her excitement: 'I felt ecstatic after winning, but I couldn't have done it without the support of my mentors.' The journey was far from easy. The team faced numerous challenges, including coordinating meeting times and locations. 'Sometimes it was difficult to decide where to gather,' Naomi said. However, the biggest obstacle was limited internet access and data shortages. 'We supported each other by sharing devices, and Mr Mtsweni, our teacher, helped by providing devices and assisting us with logging into the JSE platform,' she added. When selecting shares, the team adopted a careful strategy. 'We first checked the news – whether company-specific or external factors – and analysed charts of different companies to evaluate their growth potential,' explained Mfundo Mahlangu, a Grade nine learner from The Brave Ones. Equity experts in action Grey College's team, the profit predators, clinched the top spot in the equity category with a 3.92% gain. Their strategy – a laser focus on mining and banking sector companies, backed by diligent research and a few helpful hints from The Money Show with Stephen Grootes. 'Luckily, the market turned in our favour and we managed a good gain in profits,' the team said. Sometimes, fortune really does favour the bold and well-prepared. Speculating for success In the university speculator category, the UP Capital team from the University of Pretoria – Brett Thomson and Joshua McKay – secured victory with a portfolio growth of 12.65%. Thomson, already a veteran of the challenge, credited his win to careful risk management and a flexible strategy. The same team (plus one extra team member) won the overall ETF/ETN category in the JSE Investment Challenge 2024, walking away with R30,000. 'With all the risk in the market, it has been important to be both long and short to outperform the market. What I learnt is how to position the size of different sectors of the market according to current market risk,' Thomson explained. Catch up April's honour roll Schools The Jade Hustlers of Stellenberg High School in the Western Cape won the speculator category, with growth of 7.19%. The BGC – Skillies of Hoërskool Stellenbosch in Western Cape won the ETF/ETN category with 5.65% growth. The Brave Ones of Mpumelelo Secondary School in Mpumalanga won the income category, with a growth of R10,139,73. The Profit Predators of Grey College in the Free State won the equity category, with 3.92% growth. Universities UP Assegai of the University of Pretoria in Gauteng won the ETF/ETN category with 12.13% growth. UP Capital of the University of Pretoria in Gauteng won the speculator category with 12.65% growth. for schools and for universities. Keep in mind, applying late means you'll be eligible only for the September monthly results – not the annual finals – so it pays to sign up early and get a head start on the competition. The next champion could be you. DM
Eyewitness News
28-05-2025
- Business
- Eyewitness News
How small shareholders can actively shape corporate direction
'Boards have to start paying attention because they have to look after all stakeholders,' explains Anthonyrajah. 'This increased focus on that means that there is potential that someone who only has one share could have a voice.' Although selling your shares in a mismanaged company is an option, Makete suggests that it may not be as effective if you want your voice to be heard, particularly if it's a company you believe in. The Barloworld AGM held earlier this year serves as a good example of shareholders making a difference in corporate governance. The majority of shareholders rejected a buyout offer and voted against a remuneration policy for independent directors. Ways to have an impact, as a small shareholder: Connect with other shareholders: Build rapport with fellow shareholders to discuss recent updates, whether they involve policy changes, strategic announcements, or management appointments. Cultivating a network of shareholders can be a valuable asset when voting on corporate decisions. Build rapport with fellow shareholders to discuss recent updates, whether they involve policy changes, strategic announcements, or management appointments. Cultivating a network of shareholders can be a valuable asset when voting on corporate decisions. Find the right setting to ask questions : Anthonyrajah advises that having your concerns heard by the higher-ups may depend on the setting. Scheduling a small meeting could prove to be more effective than waiting for the AGM to ask all of your questions. : Anthonyrajah advises that having your concerns heard by the higher-ups may depend on the setting. Scheduling a small meeting could prove to be more effective than waiting for the AGM to ask all of your questions. Milestone funding: A financing method where the investor releases funds in stages, contingent upon reaching clear milestones. If feasible, milestone funding serves as an excellent strategy to mitigate risk and retain control as an investor. To stay updated on the ever-changing world of investing, tune in to Investment School, brought to you by CFI, every Thursday on The Money Show with Stephen Grootes (6pm-8pm). CFI, a global leader in online trading with over 25 years of experience, is now in South Africa! Get access to world-class trading services with powerful tools, Advanced TradingView-powered charting, 24/7 support, and over 15,000 instruments to choose from! T&Cs apply. Empower yourself with CFI and start trading today. Visit
Eyewitness News
23-05-2025
- Business
- Eyewitness News
How Africa is becoming the world's next economic powerhouse
Kopano Mohlala 16 May 2025 | 13:55 RMB Africa Investments International Monetary Fund (IMF) Acclaimed journalist Crystal Orderson specialises in economic and political affairs on the African continent. She joins Stephen Grootes on The Money Show to provide insights into significant investment trends and growth opportunities in Africa. The International Monetary Fund (IMF) states in their latest report that Africa has experienced a hard-won recovery post-Covid, though recent global events, including external funding constraints, the debt crisis, a downturn in global demand, and massive aid cuts, will impact the growth rate in Africa. However, the continent's economic landscape is vibrant and dynamic. The World Bank projects a growth rate of 3.7%, and the African Development Bank is forecasting an even more optimistic 4.3% growth rate, says Orderson. "Despite all the challenges and geopolitical shifts, there is still a significant opportunity here in Africa." - Crystal Orderson, Journalist Orderson weighs in on the impact of geopolitics and highlights a significant moment when President Cyril Ramaphosa and Rwandan President Paul Kagame shared a platform at the Africa CEO Forum in Abidjan on Tuesday. Both agreed they needed to focus on the continent's resilience. "Because Africa is an engine of growth." - Crystal Orderson, Journalist Where will the growth come from? Orderson says emerging economies are stealing the spotlight, describing these countries as 'rising stars'. Despite being the biggest economies on the continent, the growth is not going to come from South Africa and Egypt. East and West Africa are leading the charge: Rwanda: 7.1% growth Senegal: 8.4% growth Kenya: 4.8% growth Uganda: 6.1% growth Ivory Coast: 6% growth The World Bank's private investment arm, the International Finance Corporation (IFC), is betting on Africa and planning to invest $14.2 billion in critical sectors. "They say they are going to invest heavily across Africa in digital infrastructure, agriculture, manufacturing, business development, and clean energy." - Crystal Orderson, Journalist covering African issues Africa boasts an enormous surface area and is home to minerals and natural resources. "We have about 30% of the globe's critical minerals. So a big issue is roads, ports, and infrastructure - and there is massive money in that. Experts say there are two to three trillion dollars available in different pension funds" - Crystal Orderson, Journalist This is where the private sector banks and governments are forging public-private partnerships to see this investment unfold, she adds. The RMB Where to Invest in Africa Report shows Africa's five top investment destinations. "The Island economies, like Mauritius, and then Egypt, Morocco and South Africa." - Crystal Orderson, Journalist As a journalist, Orderson has visited Ethiopia many times over the years. She says the country stands out as a compelling case study of transformation. Once plagued by infrastructure challenges, it has dramatically improved its internet connectivity, road systems, and economic stability through strategic investments and diaspora engagement. The G20 and B20 summits, with South Africa in leadership, are creating unprecedented platforms for economic dialogue and collaboration. The African Union's membership in these forums signals a new era of global economic participation. "There is a realisation in Africa they cannot do it alone and need help to start unlocking growth." - Crystal Orderson, Journalist "Things are moving," Orderson emphasises. "The realisation around infrastructure, digital economy, and access to technology are game-changers, and we're seeing significant changes across the continent. The continent's narrative is no longer centred on survival but rather on strategic growth, sustainable investment, innovation, and global leadership.
Daily Maverick
20-05-2025
- Business
- Daily Maverick
After the Bell: Open for business — bring your own power and water
For as long as I can remember our government has been claiming to promote business, and to want economic growth. For the past 11 years we have even had a dedicated 'Small Business Development Ministry'. Whenever our ministers go to Western countries or places like Davos they will use the slogan 'South Africa is open for business'. And from time to time you will see President Cyril Ramaphosa or Department of Trade, Industry and Competition Minister Parks Tau arriving at some kind of launch, or the opening of a factory. But look at how tough it actually is to run a business in South Africa. Take Astral Foods. They produce something that probably three-quarters of South Africans consume. It's a simple business, they take maize, and feed it to chickens, which are then slaughtered and sold. It is a business replicated around the world, it happens almost everywhere people eat meat. And while we are not the biggest producer in the world (it has been said there is one farm in Brazil that literally produces as much chicken as we do) we are no slouches either. We have been doing it for a long time. All of this means that for Astral, to make money should not be hard. It should be one of the simplest businesses in the country. But because local government has been so useless, and it must be said, mainly because of the way the ANC has allowed its people to govern, it is now incredibly hard. In fact, Astral said in its results yesterday that it had been subsidising the price of chicken, it had actually been making a loss. It is true that this is a hugely competitive industry; like anything in the world, if it can be done here it can be done somewhere else, and the only argument is around pricing. For years the letters section of the Business Day newspaper was overtaken by the fight between domestic poultry producers and people who imported chicken on the question of whether Brazil was dumping chicken here. In other words, selling it for less than it cost to produce (for reasons that are not clear to me, people in Europe prefer the white breast milk of chickens, while most of us — correctly! — prefer the drumsticks, thighs and wings, meaning Brazilian producers could sell the bony parts at a loss). It's also true that the avian flu outbreak in Brazil might well make life a lot easier for Astral pretty soon. But we shouldn't forget the real reasons for this. On Monday night this week, Astral's CEO Gary Arnold said on The Money Show that the fact that the Lekwa Municipality around Standerton could not provide enough water and electricity for their big plant there was costing them R10-million a month. It's been so bad for so long that this is now an embedded cost; Astral budgets for it every year. This is R10-million a month that could be going to profit, or to higher salaries for all of the people who work there. Or even lower prices for people who buy what they produce. They are not the only ones hit by problems in councils, virtually everyone outside of the Western Cape is. Earlier today the CEO of the Minerals Council, Mzila Mthenjane, said that: 'In remote and rural areas where the bulk of mining happens, the dysfunctionality of municipalities makes daily operation difficult and unattractive for investments for any companies considering setting up businesses.' No one is going to invest in places where people are desperate for jobs. Joburg is now so bad, with so little prospect of a recovery in the medium term that some firms must be wondering how hard it would be to move, no matter what the cost. The main reasons for this are not about resources or the ability of South Africans. It's all about politics. And so often, the politics of the ANC. It's usually (but not always) in the councils where they provide the mayor, or are the biggest party, where this happens. Ditsobotla Municipality is the best example. For a very long time it was known as the town 'with two mayors'. This was not a fight between parties, it was a fight between two factions of the same party. Both of these 'mayors' came from the ANC. Unfortunately, local government is not the only problem companies like Astral face. As they put it in their results yesterday: 'On the global front, the uncertain landscape characterised by trade wars, various conflicts and shifting alliances poses risks for an economic slowdown, market uncertainty and currency volatility.' Again, this is all the fault of politicians. Some of them here, some of them in other places. So this evening, raise a glass to people who run businesses. It's hell out there. And we all know who to blame for that. DM
