New payment data from BankservAfrica shows consumers and businesses are tightening their belts, with the BankservAfrica Economic Transactions Index (BETI) falling to 136.4 in April — its lowest level this year.
BankservAfrica is the largest automated payments clearing house in Africa. The index measures the value of all electronic transactions cleared by the clearing house each month at seasonally adjusted real prices.
“In April, the BETI reached its lowest level of the year of 136.4, down 0.6% on the 137.2 recorded in March,” said Shergeran Naidoo, BankservAfrica head of stakeholder engagements.
The downturn, though still 1.5% higher than a year ago, follows the April announcement of US tariffs which — despite being paused — triggered a global trade war, unleashing volatility that led to plunging markets and slashed global growth forecasts.
“Low confidence and uncertainty are detrimental to economic activity, as investors and households hold back on spending decisions until more clarity is forthcoming,” said independent economist Elize Kruger.
Despite mounting headwinds, counter forces provide some relief. A sharp drop in global oil prices has eased inflationary pressures, while rising gold prices offer a buffer to SA’s export earnings. Many key commodities remained exempt from US tariffs, offering a potential reprieve for the mining sector, BankservAfrica noted in a statement.
April’s mixed data underlined the economy’s fragile state.
The S&P Global SA purchasing managers index (PMI) rose to the neutral 50.0 mark after four months in negative territory. However, the Absa PMI remained in contractionary territory for the sixth consecutive month and BankservAfrica noted that Stats SA’s manufacturing data confirmed the manufacturing sector was in a technical recession with two consecutive quarterly contractions.
Vehicle sales were a bright spot, rising by 16.9% year on year in April and up 19.3% year to date, raising the hope of a return to pre-Covid levels in 2025.
“All indicators point to the likelihood that, after several false starts, full-year vehicle sales in 2025 will finally return to pre-Covid levels, reflecting, amongst other things, an improvement in household budgets due to lower inflation and interest rates,” Kruger said.
Transaction volumes on BankservAfrica’s platform fell to 167.9-million in April from 172.4-million in March, while the nominal value slipped to R1.32-trillion from R1.365-trillion. The average value per transaction declined to R7,482, “suggesting that electronic payments are gaining popularity and also that smaller value transactions are more readily done through electronic payment streams,” the statement reads.
With inflation at 2.7% — below the SA Reserve Bank’s 3%–6% target band — calls for monetary easing are growing.
“Real interest rates are simply unnecessarily punitive for an economy muddling along, unable to gain meaningful momentum,” Kruger said.
According to BankservAfrica, there is still the hope that structural reforms, such as the launch of Operation Vulindlela 2.0 and signs of global trade de-escalation, may help to revive momentum in the second half of the year.
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