Star 2025-09-16

Deputy Finance Minister David Masondo has assured investors that government is taking “deliberate steps” to restore fiscal discipline and stabilise debt. The country's debt-to-GDP ratio is projected to stabilise at 77.4% of gross domestic product (GDP) this financial year, before declining to 74.4% by the end of the decade in 2029/30. Speaking at the RMB Morgan Stanley Investor Conference on Monday, Masondo said fiscal sustainability remains at the heart of government’s economic agenda. Masondo said when the Finance Minister Enoch Godongwana delivers the Medium-Term Budget Policy Statement (MTBPS) in November, he will provide an update on this trajectory. He said that Godongwana will also announce some adjustments to the budget process to reduce uncertainty and reinforce government’s focus on stabilising the fiscal trajectory, given the delays in tabling and approving…

Activity in the building and construction industry in South Africa is expected to continue gaining momentum for the remainder of the year due to the upward trend in the value of building plans passed. This comes as mining and materials group Afrimat on Monday reported a sharp rebound in South Africa’s construction sector during the second quarter of 2025, with its Afrimat Construction Index (ACI) showing broad-based improvements across key indicators. Compiled by economist Dr. Roelof Botha on behalf of Afrimat, the ACI measures activity in the building and construction industry. Botha said the latest reading reflected a 6.8% quarter-on-quarter rise, outpacing national GDP growth. According to Botha, the recovery of the ACI was, however, fairly predictable, as the indicators included in the index came off a low base recorded…

Oceana Group, one of South Africa's leading fishing products companies, has issued a stark warning regarding its financial performance for the year ending September 30, 2025 - a drop of at least 40% in headline earnings per share (HEPS). This would likely translate to a fall of over 367 cents per share from the prior comparative period's 917.6 cents. This expected downturn is primarily attributed to the sharp decline in fish oil prices, which have halved from record highs seen last year. The significant decrease in fish oil prices has been linked to a recovery in the Peruvian anchovy biomass, a situation that has led to a market correction following extraordinary price levels in the previous year. In addition, Daybrook's performance has suffered notably, contrasting sharply with its exceptional earnings…

Bureau says modest rebound in economic growth belies worsening operating conditions The Bureau for Economic Research (BER) has cautioned that South Africa’s modest rebound in economic growth belies the severe pressures still confronting businesses, warning that fragile private sector investment and worsening operating conditions continue to threaten the country’s growth outlook. This follows Statistics South Africa’s release last week showing that gross domestic product (GDP) expanded by 0.8% in the second quarter of 2025, lifting the probability of full-year growth exceeding 1%. Lisette IJssel de Schepper, chief economist at the BER, acknowledged the unexpectedly positive GDP outcome but warned that such gains do not reflect the realities on the ground. De Schepper said the BER’s latest business survey, which attracted more than 300 voluntary comments from respondents, indicated widespread dissatisfaction…

High credit costs are emerging as a formidable barrier to economic growth in South Africa, despite the country’s entrenched banking sector relying heavily on deposits for funding. This stark warning from Moody's Ratings on Monday highlights the critical role domestic and international funding play in bolstering the economy, with a particular emphasis on the pressures created by rising interest rates. Lucie Villa, senior vice president for Moody’s, explained that the South African Reserve Bank (Sarb) repo rate directly impacts the cost of savings and term deposits. The Sarb’s repo rate “influences the cost of savings and term deposits, as well as money market rates” for institutional deposits. “South African banks depend heavily on deposits for funding. This includes deposits from companies and households, and deposits raised from institutions, which are…

The recent projections regarding the impact that AI will have on several economic engines across the continent should not be seen as just a statistic, but a call for South Africa to address systemic barriers that have historically held back progress and to position itself as an enabler of this next wave of economic transformation. According to a recent McKinsey report titled ‘Africa’s gen AI potential’, generative AI (Gen AI) could unlock between $61 billion and $103 billion in annual economic value across sectors fundamental to South Africa’s growth like mining, heavy industry, energy and construction. While the report’s projections are compelling, we must caution against viewing technology as a panacea to all our problems. How Gen AI might move the needle We understand that using Gen AI in areas…