As SA ends 2024 on a positive trajectory supported by increased business confidence, the country should prepare for significant geopolitical challenges, particularly with the US, Business Leadership SA chief executive Busi Mavuso said.
Mavuso said there was heightened concern among Southern African chief executives around addressing international uncertainties, with concerns about the African Growth and Opportunity Act (Agoa) which facilitates trade with the US.
In March, the US House of Representatives passed a Bill for a full review of bilateral relations between the US and SA.
This Bill was triggered by concerns over the US national security and foreign policy interests as well as perceptions that SA had abandoned its nonaligned stance and also concern about its deepening ties with China, Russia and Iran.
Speaking at the Nelson Mandela Bay Business Chamber offices in the city, Mavuso said US credit ratings agency S&P had upgraded SA’s ratings to a positive outlook, which meant the country was on track towards regaining its investment grade as a country.
“There’s no doubt we’re ending the year on a positive note, but as much as we’re ending the year on a positive note, I really think we need to brace ourselves for 2025.
“I don’t think it’s nothing that we can’t navigate, but I really think we are going to have challenges, especially as far as the relationship with the US is concerned.
“I participated in a KPMG outlook survey at the beginning of the year. KPMG runs this survey where they ask CEOs globally what their view is on certain things.
“When Southern African CEOs, not South African, were asked on the issue of geopolitics, 52% of Southern African CEOs are worried about the geopolitical complexities that the country is going to face, and that number is high.
“We actually have reason to be worried as a country, because in all honesty Agoa does hang in the balance.
“With a change of administration in the US, Agoa hangs in the balance.
“Remember, you are now sitting with the Republican government and this was an initiative of the Republicans.
“So they don’t need to convince anyone. They are an overwhelming majority in Congress.
“So this thing is a foregone conclusion that our relationship with the US and SA is actually going to be reviewed,” Mavuso said.
Touching on the outcome of the May 29 elections, Mavuso said the formation of the government of national unity had widely been viewed as positive, creating optimism in the financial markets.
For the first time, the ANC lost its parliamentary majority.
“What we’re seeing at the back of the GNU is quite positive. You see in the financial markets that are clearly signalling this optimism.
“The rand was fairly resilient until [US president-elect Donald] Trump happened.
“We have seen a significant re-rating of the bond and equities market.
“Foreign inflows have gained traction, and that is important. It is important because we borrow R2bn a day as a country.
“SA finds itself there. So the positive reaction from the markets was important, because it therefore means it makes it easy for us to actually raise funding.”
Mavuso also urged business to continue doing their part and working with the government to get the basics right.
“The basics being the network industries that have failed for so many years in this country.
“Energy, transport and logistics, water, telecoms. The only one that has been functioning as it should has been telecoms.
“You need the network industries to be operating as they should.
“It doesn’t matter which sector or industry you operate in.
“You need the network industries to be operating as they should.
“So, your business case as a country becomes weak if you can’t guarantee energy stability, if you can’t get goods to market, if you don’t have water, because water is an input into many production processes.”
HeraldLIVE
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