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Irish Times
3 days ago
- Business
- Irish Times
Is South Africa's Cyril Ramaphosa running out of time?
A few hours before South Africa 's president Cyril Ramaphosa was subjected to a litany of false and embroidered charges by Donald Trump live on television in the Oval Office, back in Cape Town a more orderly but perhaps more significant debate reached a climax: the country's parliament finally passed a highly contested budget. It was the third attempt. Two previous budgets had been shot down over disagreements between the two main political parties, the African National Congress (ANC) and the Democratic Alliance (DA), in the year-old government of national unity. Each time, the financial markets were rattled over fears that the coalition might collapse – scuppering what investors see as the best chance in years for a business-leaning government. So the budget's passing was a vital moment for investor confidence. The big question is which of last week's two meetings – one in the White House; the other in parliament – will have the greater long-term impact on South Africa's trajectory. The walls are closing in on the 72-year-old Ramaphosa at home and abroad, with a hostile US, a stagnant economy and radical populist parties hovering in the wings. READ MORE Millions of South Africans watched the White House showdown live on their phones, as the US president repeated the lie, first propagated in his first term in office, that the white Afrikaner minority faces 'genocide'. Some in South Africa have suggested it was ill-advised for Cyril Ramaphosa to go to meet with US president Donald Trump in the White House earlier this month. Photograph: Eric Lee/The New York Times Members of Ramaphosa's entourage argue the visit went better than the fracas indicated. Two prominent Afrikaners, Johann Rupert, the billionaire founder of the luxury goods company Richemont, and John Steenhuisen, head of the DA party, did their best in the Oval Office to present a more accurate picture. 'I think we leave better than we came in,' Steenhuisen says. Progress was made towards a vital trade deal with America to head off the threat of 30 per cent tariffs, officials insist; with unemployment over 40 per cent, tens of thousands of jobs may depend on this. But many businesspeople are less sanguine, fearing that the spectacle did serious harm to South Africa's image, however much the claim of genocide has been debunked. 'This was awful for brand South Africa, for tourism and investment,' says a leading corporate figure. Investors were delighted last June by the formation of the unity Government and the inclusion of the market-friendly DA, ending 30 years of solo rule by the statist ANC. It was hailed as a fresh start after more than a decade in which the former liberation movement had been mired in corruption scandals and presided over an erosion of public services. One year on, with the economy growing at a little more than 1 per cent, optimism is waning. Now business leaders are arguing that the White House showdown has to be a catalyst for a new approach. They also hope Ramaphosa has returned aware of the need to act more decisively to open up the economy and keep populists on the back foot. Hendrik du Toit, chief executive of the Anglo-South African asset management firm Ninety One, does not mince his words. While he praises South Africa's unified stance in the White House, he believes 'the wisdom of going there' is open to question. 'What South Africa has to do now is move on and focus on how we can grow our economy,' he says, pointing to the appallingly high rates of violent crime and calling for a clampdown on corruption and an investment in education. 'South Africa is on the brink of an economic emergency,' he adds, citing statistics suggesting 60 per cent of workers below the age of 24 are jobless. The country is 'grinding through its challenges', du Toit says. But he worries that other developing economies are adapting better to a fast-changing world. He goes on: 'In the White House I saw a clear understanding there are threats from the populists in South Africa which need to be dealt with and that we are starting to face up to our challenges . . . The big question is for our president: Mr President, what is the next step?' John Steenhuisen, leader of the Democratic Alliance (DA). Photograph: Waldo Swiegers/Bloomberg The ANC's critics have long argued that the party is better at promising reform than delivering it. When Ramaphosa, an anti-apartheid activist turned tycoon, took over the presidency from the discredited Jacob Zuma seven years ago, he was hailed as the man to rescue the country's fortunes. Under Zuma, the party had become engulfed in the scandal known as 'state capture' as businesspeople and politicians conspired to influence decision-making for their own financial interests. After taking office, however, Ramaphosa's reputation suffered. The economy flatlined and the supply of essential services, in particular energy, water and transport, faltered. Ever the conciliator, the president was accused by many of ducking the tough decisions needed to energise the economy and root out corruption. 'I think Ramaphosa was pretty unequivocally pro-growth when he came to power in 2018,' says Jonny Steinberg, a South African author now at Yale's Council on African Studies. 'He's subsequently learned that governing the ANC and being pro-growth are not only not the same thing, but they tug against each other.' Reform of Black Economic Empowerment regulations may be under way, driven by none other than South Africa's most famous émigré, Elon Musk Ramaphosa's ANC was punished in last year's elections. Securing just over 40 per cent of the vote, it lost its overall majority for the first time since Nelson Mandela took office in 1994 and ended white-minority rule. But the formation of the unity government, crucially without the two biggest populist parties that had broken away from the ANC – the Economic Freedom Fighters (EFF) and uMkhonto weSizwe (MK) – inspired hopes of an economic recovery. Yet a combination of the global fallout of Trump's protectionism and the government's failure to fully embrace the private sector has held back prospects for this year, analysts say. The economy is set to grow at 1.4 per cent in 2025, not nearly enough to reduce unemployment. Privately, potential investors argue the biggest disincentive is South Africa's network of quotas and regulations, which were designed to address the legacy of white rule. Many have singled out the Black Economic Empowerment (BEE) regulations for particular criticism. Introduced after the 1994 elections, they were aimed at tackling the economic injustices of apartheid, when almost all companies were white-owned and run, by creating a black business class. The key clause mandated transferring a stake to a black business entity. Ramaphosa himself was one of the ANC leaders 'deployed' by the party into business in the mid-1990s as white-run companies raced to seek a high-profile black partner. But over time, critics accused BEE of doing little more than creating a new elite, one that most black South Africans could never dream of entering. Moeletsi Mbeki, a prominent commentator and the brother of democratic South Africa's second president, Thabo Mbeki, has long been a sceptic of the project. He argues that by handing out stakes in businesses, the law stifles a sense of initiative essential to foster true entrepreneurs, and that its official mission of 'economic equality' is little more than a sideshow. European managers who tell him they want to invest in South Africa say BEE is a 'major obstacle', he adds, and they 'don't have a way round it'. While the policy has been tweaked over the decades, the ANC has seen it as a touchstone. But reform may now be under way, driven by none other than South Africa's most famous émigré, Elon Musk . The Pretoria-born billionaire adviser of Trump has in recent months launched a campaign against BEE laws, labelling them as 'openly racist'. If he has to comply with them, he will not introduce his satellite broadband network Starlink into South Africa, he has said. On the eve of the White House meeting, Maropene Ramokgopa, minister for planning, monitoring and evaluation, and one of the most senior ANC officials, told the Financial Times a compromise may be in the offing, and not just for Musk. More investors could take advantage of a 'workaround' to allow them to fund social projects instead of handing over equity, she said. Julius Malema, leader of the Economic Freedom Fighters, at a rally where he chanted 'Kill the Boer!' in the Soweto township of Johannesburg in July 2023. US president Donald Trump surprised a South African delegation with a video montage of apartheid-era chants from Malema. Photograph: Joao Silva/The New York Times 'Scrapping BEE is not a good thing,' she added, arguing it would outrage the ANC's supporters and lead to a 'revolution'. But, she added, there were 'mitigating avenues' that could facilitate investment. 'For example, you can say, 'I'll create thousands of jobs or I'll help you build schools.'' Although Musk attended the White House session with Ramaphosa, he did not speak, but was present at the subsequent private lunch. It is seen as no coincidence that two days after the talks, the government published a proposed policy change that could enable Starlink's owner to invest. This would allow people applying for a communications licence to invest in social projects instead of giving a 30 per cent stake to 'historically disadvantaged groups' – a workaround already offered to car manufacturers. Business leaders and DA insiders hope this may be the first step to a broader rethink, but they are not holding their breath. 'BEE must remain,' says a senior business figure. 'But does it have to include ownership? We should be the mining capital of the world but we're not, and a lot of that is because of the difficulties of BEE.' One of the few obvious positive outcomes of the trip for South Africa was that Trump did not scold the country over its close ties with America's rivals and enemies, nor its hostility to Israel. Democrats and Republicans alike have been irked by South Africa's uncritical stance towards Russia, China and Iran in recent years, and also by its sponsorship in 2023 of the genocide case against Israel at the International Court of Justice over its assault on Gaza. In a sign of a possible thaw in relations, Ramaphosa says Trump might after all come to the G20 summit in November, which South Africa is hosting. Trump's secretary of state, Marco Rubio, and treasury secretary, Scott Bessent, have boycotted meetings of their G20 peers this year. Diplomats argue South Africa has been far less nimble than other nonaligned states. 'South Africa has not been as agile and responsive in balancing interests [as its peers],' says Elizabeth Sidiropoulos, head of the South African Institute of International Affairs. 'We need to think how we can manage our relationship with America more effectively, and in a way that doesn't compromise our vital economic priorities.' The scale of the economic stakes is all the more apparent since Trump launched his trade wars. South Africa has benefited hugely from America's 25-year-old Africa Growth and Opportunity Act, which allows duty-free access for certain products from some African states. This is due to expire in September, and South African officials accept that it is unlikely to be renewed, with potentially devastating repercussions for South Africa's agriculture and car industry. If the government does fall, investors fear the more radical wing of the ANC might push for an alliance with parties that advocate nationalisation of industry and land redistribution of the sort Trump claims falsely is already under way Vincent Magwenya, Ramaphosa's spokesman, told the Financial Times this year that South Africa would not be bullied by Trump into dropping its nonaligned stance. 'It's going to be hard for Americans to swing us in one direction or another,' he said. 'Trump will not be president of the US forever and if we have to ride over a few years, we will ride it.' Still, Ramaphosa clearly concluded he needed to repair relations with Washington, not least after his US ambassador was expelled in March after saying Trump was 'mobilising a supremacism'. With this in mind, Ramaphosa came to Washington with a package of measures, including preferential access for US companies to South Africa's critical minerals and gas, and also easing South African restrictions on US poultry and pork. 'We need America,' said minister Ramokgopa, adding: 'They need us as well.' For decades, South Africa has lurched between optimism and pessimism – usually to undue extremes. Now, once again, it is at a critical juncture. On the more moderate end of the ANC spectrum, Ramaphosa is seen as uniquely able to hold together a coalition that spans stalwart ANC ideologues on one side and DA free-marketeers on the other. The passage of the budget – after the DA rebelled successfully against a move by the ANC finance minister to increase VAT – has underlined the ability of the coalition to weather storms. Privately DA and ANC insiders concede it is in their interests for it to endure, although it will be tested again, not least next year when the country holds local elections. Tony Leon, a former DA leader and author of a new book on the formation of the government of national unity, says it will face more strain, but that the DA has decided it is there for the long haul. 'Crises can erupt down the line, but the DA is saying that if you want to get rid of us, you need to fire us, we are not walking out.' If the government does fall, investors fear the more radical wing of the ANC might push for an alliance with the EFF, led by the demagogic Julius Malema, and Zuma's MK, which advocate nationalisation of industry and land redistribution of the sort Trump claims falsely is already under way. For now, its defeat over VAT has put the ANC on its mettle and brought a new competitive vigour to politics. 'For all its weaknesses and internal fights, the [coalition] performed better than the ANC Government in the previous five years,' says William Gumede, a prominent commentator. 'There is a sense of hope. We've seen real movement in some areas of delivery. Public servants are feeling the pressure. Up to now they were so complacent. Now ministers are being upstaged in public by the DA. The populist cause is on the back foot – but if the [unity government] collapses the populist cause would come back.' As ever in ANC politics, there is much intrigue. Behind the scenes, a succession battle has begun ahead of leadership elections in 2027. For the first time in the party's post-apartheid history there will be no liberation-era grandee contesting the top job. The future of the coalition – and the chances of the populists making a comeback – depends on the identity of the victor. Long before Ramaphosa became president, many in and outside the ANC pinned their hopes on him as a prudent helmsman. Many of his erstwhile fans have grown disappointed and now see him as too cautious. 'The country is on autopilot,' says Mbeki. Now the final chapter of Ramaphosa's long career has begun. For his allies, he has one last opportunity to prove his sceptics wrong – and grasp the nettle of reform. – Copyright The Financial Times Limited 2025
Zawya
27-05-2025
- Business
- Zawya
Wall St set to open sharply higher after long weekend on Trump's trade reprieve
Wall Street was poised for a strong open on Tuesday after U.S. President Donald Trump dialed back his threat of tariffs on EU imports, defusing trade tensions between the United States and the European bloc and boosting investor confidence. On Sunday, Trump rolled back his threat to impose 50% tariffs on imports from the EU next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to arrive at a deal. He had said on Friday that he was recommending a 50% tariff effective June 1 and expressed frustration that trade negotiations with the EU were not moving quickly enough. "The negotiating style of President Trump is known by now. It will come at you hard and then they'll be able to pull back a little bit," said Joe Saluzzi, co-head of equity trading at Themis Trading. Asian and European markets were mixed after rising on Monday, although moves in U.S. assets were more pronounced as traders returned after the long Memorial Day weekend. At 08:30 a.m. ET, Dow E-minis rose 529 points, or 1.27%, S&P 500 E-minis gained 80 points, or 1.38%, and Nasdaq 100 E-minis were up 312.5 points, or 1.49%. Most megacap and growth stocks jumped in premarket trading. Apple was up 1.9%, Alphabet climbed 1.7% and Tesla rose 2.4%. Trump Media & Technology Group soared 9.6% after a media report said Trump's social media firm planned to raise about $3 billion to spend on cryptocurrencies such as bitcoin. Shares of semiconductor industry bellwether Nvidia kicked off the week with a 2.5% rise. The company is slated to report quarterly earnings after markets close on Wednesday. Long-dated U.S. Treasury yields dipped, while those on the 30-year note were set for their biggest one-day fall since mid-April, mimicking a steep price rally in longer-term Japanese debt. In economic data, minutes from the U.S. Federal Reserve's last policy meeting are scheduled to be released on Wednesday. A number of Fed officials are expected to speak through the week. Minneapolis Fed President Neel Kashkari on Tuesday called for holding interest rates steady until there was clarity on how higher tariffs impact inflation. Personal Consumption Expenditure data - the Fed's favored inflation indicator - for May and a second estimate of first-quarter GDP are also scheduled to be released later this week. Wall Street witnessed sharp weekly losses on Friday as worries about mounting U.S. debt and Trump's latest trade policy shakeup sparked a broad selloff. His sweeping tax bill - which is expected to substantially expand federal debt - passed a critical House vote last Thursday. The S&P 500 is about 6% from record highs, although it has rebounded sharply from April lows as easing trade concerns and tame inflation data spurred a risk-on rally. Temu-parent PDD Holdings dropped 19% after missing Wall Street's first-quarter revenue estimates. (Reporting by Shashwat Chauhan and Kanchana Chakravarty in Bengaluru; Editing by Pooja Desai)
Yahoo
22-05-2025
- Business
- Yahoo
SHIB Holds Strong Above Key Support as Volume Spikes Nearly 4x
SHIB's remarkable resilience during the recent trading session demonstrates growing investor confidence despite market turbulence. The token's ability to recover from a sudden drop to 0.0000143 with extraordinary volume support suggests institutional accumulation rather than retail panic. With the psychological support at 0.000015 holding firm and multiple tests of upper resistance, SHIB appears poised for potential continuation of its upward trajectory if current accumulation patterns persist. Technical Analysis Highlights SHIB demonstrated remarkable resilience over the 24-hour period, climbing from 0.0000146 to 0.0000150, representing a 2.85% gain with a range of 0.00000081 (5.64%). The token experienced significant volatility at 17:00 when price plummeted to 0.0000143 before finding strong volume support. A massive 2.83 trillion volume spike—nearly 4x the average—provided crucial support during the recovery phase. Key resistance at 0.0000151 was tested twice during the period, with accumulation patterns forming in the final hours. Three consecutive high-volume candles (23:00-01:00) established a solid foundation above the 0.000015 psychological level. In the last hour, SHIB exhibited notable volatility with a significant price surge at 01:22 when it broke above the 0.0000151 resistance level, reaching 0.00001514 by 01:31. Elevated trading volumes supported the bullish momentum, particularly during the 01:36 candle which recorded nearly 80 billion in volume. A sharp correction at 01:37-01:38 dropped the price 5% to 0.00001505, before establishing a consolidation pattern. External References "Analyst Says When This Shiba Inu Breakout Happens, You'll Want a Piece of SHIB", The Crypto Basic, published May 21, 2025. "Shiba Inu (SHIB) Primed for Breakout as Accumulation and Burn Rate Surge", Coin Edition, published May 21, 2025.
Yahoo
20-05-2025
- Business
- Yahoo
Donald Trump is heading for his own Liz Truss moment
Nigel Farage was recently asked whether Donald Trump would prove to be 'chump or champion' with his tariffs blitz. His response was that it was too soon to tell, but even a Trump acolyte like the Reform leader would surely concede that the early signs are pretty woeful. The US president is erratic at the best of times but his trade war has been utterly indiscriminate. At times, the US administration's approach has resembled little more than a circus with Trump as the drunken ringleader utterly unfit to direct the show. Anticipating his next move is a fool's errand. Parallels with the chaos that characterised Liz Truss's fleeting few weeks as prime minister are unavoidable. Like Truss, Trump has been forced into a humiliating retreat after trying to face down the financial markets and suffering an emphatic defeat. And in much the same way that the spectre of Britain's shortest-serving leader still hangs over the UK economy nearly four years after her ejection, investor confidence remains desperately fragile despite America and China quickly agreeing to a truce on tariffs. Trump's real Truss moment may still be to come, however, as investor fears shift from a devastating trade war with Beijing to his plans for a new era of sweeping tax cuts that could tear a fresh hole in federal finances. The investment community's response was both swift and overwhelmingly negative to the approval of Trump's tax cuts bill by a key congressional committee on Sunday, following days of Republican infighting over spending cuts to Medicaid. Indeed, the backlash had begun on Friday afternoon courtesy of Moody's. Anticipating a breakthrough that would put Trump's 'big, beautiful bill' on the path to possible passage in the House of Representatives later this week, increasingly nervous analysts stripped the US of its prized top sovereign credit rating. The Trump administration's 'nothing to see here' response to the loss of a triple-A credit rating isn't remotely convincing. Ditto its lame attempts to lay the blame for this squarely at the door of Joe Biden on the same day that he was diagnosed with aggressive prostate cancer. Yes, as US treasury secretary Scott Bessent argued over the weekend, the downgrade is something of a lagging indicator of fiscal health. 'We didn't get here in the past 100 days. It's the Biden administration and the spending that we have seen over the past four years that we inherited,' he pleaded. Moody's was the last of the three major credit ratings agencies to reduce its assessment of the federal government's creditworthiness. Standard & Poor's made its first ever downgrade back in 2011, and Fitch Ratings followed suit in 2023. Meanwhile, Moody's itself attributed the move to 'the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns'. Bessent is being highly selective in his attempts to pin the blame on Biden – and he knows it. What the White House is less forthcoming about is that Trump's tax plans also played a major part in its decision with Moody's warning that the outlook for US finances was becoming bleaker. 'The US's fiscal performance is likely to deteriorate relative to its own past and compared to other highly rated sovereigns,' it said amid forecasts that Trump's massive tax and spending bill will add trillions to the federal debt over the coming years. Nor can Bessent blithely brush off the downgrade as inconsequential. A triple-A credit rating is the gold standard and regardless of the extent to which previous administrations are to blame, its removal is a damning indictment of Trump's reckless plans and one that is likely to prove hugely costly. Although the US still has one of the highest credit ratings in the world, the downgrade means that US government debt is now seen as higher risk, leaving Washington to confront the very real and immediate possibility that it will have to pay higher interest rates on future borrowing, further exacerbating its financial squeeze. The S&P 500 and the Nasdaq fell as much as 1.1pc and 1.4pc respectively at the start of trading on Monday. The US dollar meanwhile slid 0.9pc against a basket of its peers including the pound and the euro, but the most notable feature of the reaction from investors was in the bond markets. A sharp sell-off in US government debt pushed the yield on 30-year Treasuries above 5pc leaving long-term borrowing costs at their highest level since late 2023, compared to rates as low as 1.2pc just five years ago. Ten-year rates – the yield that Bessent insists he and Trump are most focused on as a gauge of America's economic health – are creeping back that way too. Pooja Kumra, at TD Securities, described the reaction as 'another warning for a US administration already on bond vigilante alert'. Markets are right to be nervous. America's national debt has been consistently rising over the past two decades, leaving borrowings at an eye-watering $36 trillion (£27 trillion), and the federal budget deficit sitting at close to $2 trillion a year – equivalent to more than 6pc of gross domestic product. Trump's plans to extend his 2017 Tax Cuts and Jobs Act will add $4 trillion to the deficit over the next decade, or nearly 9pc of GDP by 2035, Moody's calculates. At the same time, higher debt interest costs and low tax revenue will push US federal government debt to 134pc of GDP over the same period, a big jump up from 98pc last year. A 5pc yield on 30-year US government bonds is significant. As Deutsche Bank strategists point out, 'we are now reaching yield levels that previously seemed to trigger sensitivity from the US administration'. The last time they reached such heights, Trump announced a 90-day pause on reciprocal tariffs, acknowledging that it was because investors were getting 'yippy' and 'afraid' – proof he is capable of behaving rationally after all. As veteran asset manager Stephen Jen, of Eurizon SLJ Capital, has argued, it may be necessary to have a repeat of what happened to Truss 'to force everyone' in the White House 'to do the right thing' again. Having already been forced into one embarrassing about-turn, the question is whether Trump can afford to reverse course a second time. Ultimately, however, it may be that the US economy can't afford for him not to. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Reuters
16-05-2025
- Business
- Reuters
Turkey's Celebi sues India over 'vague' clearance pullback amid Pakistan conflict
NEW DELHI, May 16 (Reuters) - Turkey-based Celebi, a provider of airport ground handling in India, has launched a legal challenge to New Delhi's decision to overturn its security clearance, arguing in a court filing that "vague" national security concerns were cited without reasoning. Amid growing public anger in India about Turkey's stance on Pakistan in the India-Pakistan conflict, the Indian government on Thursday revoked Celebi's security clearance in the "interest of national security." Celebi Airport Services India, in a May 16 filing seen by Reuters, asked the Delhi High Court to set aside that decision, arguing it would impact 3,791 jobs and investor confidence, and was issued without any warning to the company. "Mere rhetoric of national security without elaborating upon in what manner is an entity a threat to national security is unsustainable in law," the company said in the filing, which is not public. Its details have not previously been reported. India's government did not immediately respond to a request for comment. The case is likely to be heard on Monday. In its filing, Celebi also said its shareholders were registered in Turkey, but the "majority end control" is held by companies of global repute who do not have Turkish incorporation or origin.
