In a timely Pitso webinar hosted on Friday, 11 April, the North-West University (NWU) Business School featured distinguished panellists who discussed the vulnerable status of African economies caught in the crossfire of escalating international tariff wars. As countries on the continent compete for both economic sovereignty and competitive advantage, the discussion focused on how the economic power struggle between the US and China is changing trade landscapes throughout Africa.

The unexpected decision by President Donald Trump to suspend the reciprocal United States (US) tariffs on non-retaliatory countries for 90 days pending further negotiations has prompted a strong rebound in financial markets and a modification of previous gloomy economic forecasts.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says this decision now creates a welcome window of opportunity for many countries, including South Africa, to negotiate with the US for lower tariffs.

The scale of the further wide-ranging United States (US) unilateral tariff hikes announced by President Donald Trump will not only drive a huge wedge into the world’s multilateral trading system but is also bad news for the South African economy. 

The decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) to leave the repo rate unchanged highlights the role of non-model-based judgement in policy choices, especially in current uncertain circumstances.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says this decision that was made by the MPC on 20 March was decided by a 4 to 2 vote.

The Business School at the North-West University (NWU)’s second Pitso online seminar brought together economic experts to examine South Africa’s current financial situation. The discussion, titled Budgeting for Austerity, featured analyst and columnist Khaya Sithole, who moderated the webinar; independent economist Elize Kruger; and Sanisha Packirisamy, an economist at Momentum Investments.

The revised Budget statement presented to Parliament by Finance Minister Enoch Godongwana on 12 March, proposing a new fiscal mix of spending, borrowing and taxing as a response to the previous opposition to the 2% rise in VAT proposed in the original Budget, diverges to some extent from the parameters outlined in the original Budget.

The North-West University (NWU) Business School has established a formidable foundation and inaugurated the PhD Hub for Africa, a pioneering initiative aimed at nurturing doctoral talent and enhancing supervisory expertise throughout the continent. The PhD Hub was officially launched on Monday, 10 March 2025, during the International Conference on Green and Sustainable Development held at the Kigali Serena Hotel in Rwanda.

The fourth quarter (4Q) gross domestic product (GDP) growth figures that were released on 4 March are positive, but the mild recovery in the GDP in the 4Q of 2024 again confirms that the Government of National Unity (GNU) is right to have set much higher inclusive growth and stronger job creation as South Africa’s key overarching economic priorities.

The unprecedented decision by the Government of National Unity (GNU) Cabinet to postpone the Budget until 12 March because of disagreement over tax increases will inevitably have unintended consequences for South Africa’s political economy.

Prof Raymond Parsons, economist from the NWU Business School, says if the eventual Budget in March turns out to be truly committed to growth and job creation (as was outlined in the recent GNU Medium Term Development Plan) the delay would have been worthwhile if the GNU gets agreed trade-offs and better outcomes for the economy as a whole.

“We should not underestimate what may ultimately be at stake for the South African economy and business in the face of the current sharp breach in bilateral political and diplomatic relationships between the United States (US) and South Africa.”