Concern is spreading about whether a consensus will be reached for Finance Minister Enoch Godongwana’s Budget to be passed as the deadline of next Wednesday 2 April looms.
Image: Armand Hough / Independent Newspapers
"April is the cruellest month, breeding / Lilacs out of the dead land, mixing / Memory and desire, stirring / Dull roots with spring rain." — T.S. Eliot, The Waste Land (1922)
T.S. Eliot’s 'April is the cruellest month' unfortunately rings true for South Africa in 2025 — not as a hopeful spring, but as we face unprecedented, unpalatable economic challenges, none of which are easy.
This Wednesday, as South Africa moves into April, brings to the table a critical Budget vote, US President Donald Trump’s tariff deadline, and uncertainty over a new US Ambassador to our sunny shores. It’s a gauntlet demanding sharp focus from businesses and policymakers.
Parliament will soon vote on Finance Minister Enoch Godongwana’s controversial revised Budget, now mired in Government of National Unity (GNU) discord. The ANC maintains it will pass, staving off a coalition crisis, yet the diluted VAT hike remains a divisive hurdle. Moody’s foresees a compromise, with national debt set to peak in the next fiscal year.
Budget unity is crucial
The reality is stark: years of borrowing and a mere 1% growth have left South Africa’s finances threadbare. Households grapple with rising pressure, the nation is swiftly deindustrialising, and businesses - though buoyed by the GNU - must relentlessly strategise to counter the government’s costly inefficiencies. (That lovely, resilient, innovative, and hard-working South African spirit. The very quality that the so-called PayPal Mafia - Peter Thiel, David Sacks, and Elon Musk - know the value of. Only too well I fear!).
At this pivotal moment, however, the vote is less a choice than a necessity. Political unity is crucial as South Africa finds itself squarely in America’s economic and political crosshairs. Facing the world’s foremost power, unity trumps division - experts universally caution, “Don’t poke the bear.”
Globally, April 2 marks Trump’s tariff rollout - 18% on EU imports, per Wall Street, with Deutsche Bank pegging a 43% recession risk. South Africa, tied to $18 billion (R331bn) in US trade (2023 data), feels the heat. Over 600 US firms like Ford and Coca-Cola operate here, while $1.6bn in car exports (Naamsa 2023) fuel our economy. A 25% tariff could cut millions of dollars in trade, knocking GDP and jacking up inflation.
Cooling inflation and recent rate cuts from the South African Reserve Bank offered consumers a faint glimmer of hope after gruelling months of a cost-of-living crisis in a high-inflation landscape. However, this looming trade war could swiftly snuff out that relief. Economists, including Nedbank’s Nicky Weimar, caution that inflation will soar as trade tensions intensify, driving up the cost of food, petrol at the pumps, and electricity. Compounded by Eskom’s recent tariff hikes, this surge threatens to cripple households once again, striking hardest at the poor and unemployed.
Trump's cautionary rhetoric
Trump’s doing more than tariffs - he’s making South Africa a warning sign for Americans and is amping up this rhetoric in media on a blunt policy tool. Growing up, my parents told me to eat my greens because kids were starving in Ethiopia; later, South Africans pointed to Zimbabwe’s collapse as a lesson. Now, Trump holds us up as his cautionary tale: a country stuck at 1% growth, too diverse, too socialist, and on the edge. He blasts our land reform and BRICS ties, showing us off as what happens when you don’t follow his playbook.
Trump’s words carry weight - he holds the economic upper hand. With US-South Africa tensions rising, it’s almost certain South Africa will lose the African Growth and Opportunity Act (Agoa), up for renewal this year. Agoa goods account for roughly a quarter of the $15bn annual trade with the US, putting thousands of jobs at risk. If Agoa lapses or tariffs hit, businesses face shrinking trade, hammering exporters and factories. South Africa must tread carefully or face a hefty blow.
Ramaphosa's response
President Cyril Ramaphosa gets how serious this is. At the DENOSA Congress in Gauteng’s East Rand this week, he spoke after Trump’s team expelled Ambassador Ebrahim Rasool and cut US aid.
“Our ambassador has come back home, and obviously it behoves on us as a government to mull over replacing our ambassador,” he said. “The United States is the second largest trading partner to South Africa, so we need top-class representation in the US.” He called the aid cut “a wake-up call” for self-reliance, adding, “We must find ways all the time to look after the welfare of South Africans with our own money.” Ramaphosa is thus pushing to keep South Africa’s interests front and centre.
Ambassador uncertainty
The US Consulate clarified on March 28 that L. Brent Bozell III’s nomination isn’t final - Trump’s choice needs Senate approval, a process of reviews and votes before he’d start. Bozell - a Trump supporter with a media background - means business. The Cape Sea Route, key since Yemen’s Houthis messed up the Red Sea, is something the US wants under its thumb. Our BRICS ties anger Trump, and Bozell could demand trade favours or threaten sanctions if we don’t play along. South Africa with its economy stalled, with 32% unemployment, and little cash left, is in an impossible situation and vulnerable.
Quiet diplomacy is harder when South Africans’ resentment towards America has hit an all-time low, fuelled by the US abruptly slashing HIV/AIDS programme aid—a move set to cost thousands of lives. While America’s near-bankrupt state and focus on domestic finances are understandable, its reckless, bull-in-a-china-shop approach, with no warning, promises dire consequences.
A tight geopolitical spot
While South Africa is part of the Global South and BRICS is part of the country's DNA, US trade ties are too important to give up. Dr Iqbal Survé, in his March 6 Business Report article, “Navigating global power shifts amid Trump crisis: Insights for SA,” warned us about Washington’s shift.
With decades in global forums like BRICS and the World Economic Forum, he wrote, “Not recognising the winds of change in Washington…will have severe consequences.” He flagged Trump’s antagonism - tied to our ICJ case, perceived Iran links, and Ramaphosa’s Biden ties - as a “direct challenge to our nation’s strategic future.” Survé’s wise words ring true: South Africa can’t ignore this storm. We must heed him and act to protect our own interests.
As a daunting April looms, South Africa must tread carefully amid Trump’s sweeping changes, yet seize this moment to prioritise our own interests—for the sake of all South Africans. The GNU must secure Budget certainty now to confront the trouble at our door. Businesses need to brace themselves - locking in costs and seeking new markets—while leaders balance US pressure against BRICS possibilities. Ramaphosa’s spot on: robust diplomacy is essential. If ever there was a time for business, labour, and government to unite, it’s now. A storm’s brewing, and we need all hands on deck, standing together.
Philippa Larkin, is the executive edior of Business Report.
Image: Supplied
Philippa Larkin is the executive editor of Business Report.
** The views expressed here do not necessarily represent those of Independent Media or IOL.
BUSINESS REPORT