This week’s narrative is defined by contested value across trade diplomacy, monetary policy and institutional credibility.
Finance minister Enoch Godongwana’s push back against what he deems to be a unilateral 3% inflation anchor signals a turf war over macroeconomic signalling. That was enough for Nedbank and S&P Global, as reported by Hilary Joffe, to sound the alarm on misalignment that has the potential to undermine debt sustainability efforts.
It pairs neatly with Duma Gqubule’s calls for democratic oversight of the Bank’s mandate (echoed by reader Jan Moganwa) and underpins my oped question: who really controls the inflation rule book?
Meanwhile, Hajra Ormajee listened to trade, industry and competition minister Parks Tau — whose brief account of how SA negotiators made trade offers in the dark offered a window into Trump’s trade playbook — and international relations and co-operation minister Ronald Lamola as they unveiled a temporary antitrust exemption, dubbed a bloc exemption, allowing rival exporters to co-ordinate logistics and market intelligence without fear of cartel prosecution.
The exemption is part of the emergency toolkit to blunt Trump’s 30% tariff on SA exports. Will it help? It’s too early to tell. But Naamsa warns that a socioeconomic crisis is already in the making. Exports to the US are already down three quarters in the first quarter, and plunged further in April-May, as Dennis Droppa reports.
And Joffe is sceptical about the block exemption, branding it as an act of desperation rather than part of a coherent trade-diversification strategy. What worries her more is the open door this grants for patronage and political interference.
Our external columnists also delivered sobering analysis and predictions of what the tariff wall would mean for the economy, whose fragile prospects have already been pounded by structural constraints.
Stuart Theobald estimates a direct GDP hit of up to 0.35%, with the substitution effect and global demand slumps compounding the damage. Ayabonga Cawe’s piece was the intellectual backbone. Drawing from Jana Marx’s compiled timeline of the bilateral trade relationship between SA and the US, he reminded readers that trade policy has always been shaped by hostility and contestation, not just co-operation.
Of course, the context of the 30% tariff adds fuel to the fire. Legislators, mainly Republicans, are pushing for personal sanctions against unnamed ANC leaders, under a grotesque farce of a white genocide. Predictably, as Luyolo Mketane reported, ANC secretary-general Fikile Mbalula was defiant, responding to the potential personal sanctions with “Bring them on” and framing the move as imperialist coercion against BEE. His stance adds a combustible political dimension to this week’s economic anxieties.
In the corporate trenches, Prime Kapital’s glossy voluntary offer for MAS comes with a 50% premium and choice of cash or preference shares, according to Noxolo Majavu and Nompilo Goba, who tracked the developments. Still, its underlying joint venture reeks of self interest, Michael Avery reckons.
Elsewhere, iOCO is slowly becoming a case study in institutional credibility restoration. From a scandal-ridden tech firm to one with a 72% year-to-date stock surge, iOCO’s buyback is a signal of internal confidence, a vote of confidence in its own valuation and future prospects, as outlined by Mudiwa Gavaza.
SAB CEO Richard Rivett-Carnac added a regulatory dimension to this week’s theme of contested policy signals. He warns that the Treasury’s minimum unit pricing for alcohol could backfire, hitting jobs, tax revenue and public health by driving consumers into the illicit market. It’s almost guaranteed that his comments will be met with forceful pushback from health activists.
In Australia, Peabody’s refusal to pay R69bn for Anglo’s coal assets after a mine fire revives concerns over deal fragility and contested interpretations of risk. Anglo insists the fire doesn’t constitute a material adverse change. Either way, the standoff risks setting back strategic plans by Duncan Wanblad, who has persuaded shareholders that two birds in the bush are better than one in hand after rejecting the BHP bid last year.
We wrapped up the week with Kabelo Khumalo’s piece on how the 2021 Political Party Funding Act can pry open shadowy donor networks and shore up faith in our democracy.
This week’s stories converge on a single truth, that when institutions speak out of sync — whether in trade, monetary policy or regulation — the market listens and often punishes.
Until next week. Every story is your business.
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