AGP Executive Report

Mini-Budget Pressure: Finance Minister Enoch Godongwana faces calls for fuel-price relief as soaring costs squeeze households, but economists warn levy cuts would cost the fiscus and risk weakening efforts to stabilise debt. Trade at Risk: President Cyril Ramaphosa says South Africa must prepare for losing US trade benefits, with jobs and exports exposed; the government is looking to China and India for new markets. Investment and Jobs: Coega Steels has launched a R500-million low-emissions mill expected to create 600 jobs, while Vedanta plans a $600-million investment to double its South African zinc capacity. Finance and Payments: South African pension funds are returning to private equity, helping investment reach R13-billion, as the Reserve Bank pushes for cheaper digital payments and broader access to cash. Economic Outlook: Economists see scope for a credit-rating upgrade after the budget, but weak growth and mounting debt remain key risks.

Trade and Currency: ICBC and Standard Bank have unveiled 10 measures to expand renminbi payments, financing and clearing across Africa, aiming to make trade between China and the continent easier. Budget and Fuel Costs: Ahead of Wednesday’s mid-term budget, President Cyril Ramaphosa says further fuel-price relief is under consideration, but notes a previous R24bn subsidy diverted money from other programmes. US Trade: Ramaphosa is urging South Africa to prepare for a possible loss of AGOA benefits, as the country looks to China and India for export markets and warns of risks to jobs. Regional Banking: Nedbank has completed its 66% takeover of Kenya’s NCBA, extending its reach into East Africa and connecting two major banking groups. Mining Investment: Vedanta plans to invest $600m to double its South African zinc capacity, a major bet on local mineral processing. City Finances: A new risk monitor warns that municipal debt, failing infrastructure and weak administration are holding back economic growth and investor confidence.

Fuel Costs: Ramaphosa says the government is weighing relief as fuel prices climb, while warning that a previous R24bn subsidy diverted money from other programmes. Unions and taxi operators are urging budget measures to ease pressure on households and public transport ahead of Wednesday’s MTBPS. Trade Risk: Ramaphosa says South Africa must prepare for possible exclusion from the US’s AGOA trade scheme, which could put jobs at risk; Pretoria is seeking alternative markets, including China and India. Banking Expansion: Nedbank has completed its 66% takeover of Kenya’s NCBA, extending its presence in East Africa. Business Results: Karooooo reported record quarterly operating profit of R422m as Cartrack subscriptions grew, despite the stronger rand weighing on overseas earnings. Mining Investment: Vedanta is investing $600m to double its South African zinc capacity. Business Funding: A new report puts the financing gap for Black-owned businesses in South Africa at $45bn, the second-largest among five African markets studied.

Fiscal Outlook: Treasury is expected to revise revenue forecasts up by R40bn–R50bn in Wednesday’s mid-term budget, with banks tipping a narrower deficit. But weak growth and rising fuel costs will test the government’s resolve to save the windfall and reduce debt. Fuel Pressure: Ramaphosa says further relief is under consideration, but warned that the previous R24bn subsidy diverted money from other programmes. The AA says petrol could reach R40 a litre by year-end if global conflicts persist. Mining Investment: Vedanta’s R10bn Gamsberg expansion has doubled zinc capacity to about 500,000 tonnes a year and is expected to create 800–1,000 operating jobs. Property: Equites reported 5.3% rental growth in its South African portfolio and raised its interim dividend by 5.1%, reaffirming full-year distribution growth guidance of 5%–7%.

Mining Investment: Vedanta has doubled Gamsberg’s annual zinc capacity to 500,000 tonnes after a nearly $600 million expansion, and says it aims to build smelting capacity in the Northern Cape. Payments Reform: The SARB plans to let licensed non-bank firms connect directly to South Africa’s payment system from around mid-2027, a move intended to boost competition and lower costs. Famous Brands: The restaurant group expects earnings per share to fall by as much as 33% for the six months to August, largely because of a R40.9 million Botswana impairment; higher fuel costs and interest rates are also weighing on profits. Freight Bottleneck: Durban Gateway Terminal is still operating below pre-crisis levels, with reported cargo delays of 18 to 21 days after an IT change disrupted operations at a key port for South African trade. Power and Business: Johannesburg’s central-substation damage, cable theft and vandalism have prolonged outages and driven up costs for businesses. Ekurhuleni is also awaiting a decision on its bid to procure power from independent producers. Household Pressure: Rising fuel prices are adding to the cost-of-living squeeze facing South Africans.

Mining Investment: Vedanta has doubled annual zinc capacity at its Gamsberg mine to 500,000 tonnes after investing nearly $600 million, strengthening South Africa’s position in a key industrial metal. Durban Development: eThekwini is pursuing a R1.9 billion superyacht marina project, targeting more than 2,500 direct jobs by 2030. Retail: Shoprite lifted annual sales 7.2% to R270.8 billion and trading profit 8.4% to R16.2 billion; Sixty60 sales surged 34.5% to R25.5 billion. Auto Manufacturing: Government is ending support for imported vehicle kits, pushing manufacturers to build more locally as the industry faces pressure to protect jobs and deepen investment.

Innovation Finance: Young South African innovators say funding shortages, intellectual-property hurdles and weak industry support are keeping promising research from becoming viable businesses. Investment: Afreximbank is convening African state governments, investors and lenders in November to turn infrastructure, industrialisation and trade proposals into bankable projects. Mining: Vedanta has doubled capacity at its Gamsberg zinc mine in the Northern Cape, lifting potential output to about 500,000 tonnes a year. President Cyril Ramaphosa urged the company to refine more zinc locally and build manufacturing around the resource. Retail: Shoprite reported sales growth of 7.2% to R270.8bn in its latest financial year, while its Sixty60 delivery business grew 34.5% to R25.5bn. Johannesburg Trade: Police seized counterfeit goods valued at more than R160m in a raid on the Joburg CBD, highlighting the scale of illicit trading. Manufacturing: South Africa is ending subsidies for imported vehicle kits, putting pressure on automakers to expand local production.

Johannesburg Crackdown: Police seized more than 62,000 counterfeit items worth over R160 million in the CBD, warning illegal trade undercuts legitimate businesses and puts consumers at risk. Hotel Investment: Koos Bekker’s family trust has raised about $500 million through Naspers and Prosus share sales to fund hotel construction in South Africa, the UK and Italy. Rail and Manufacturing: South Africa signed a roughly $400 million deal with Wabtec to improve freight trains carrying minerals and exports, while ending subsidies for imported vehicle kits to push automakers towards local production. Markets and Trade: The rand firmed ahead of the budget statement, while Pretoria warned that Red Sea attacks threaten shipping routes and international trade.

Payments: The Reserve Bank plans to pilot a shared network for more than 30,000 ATMs from January, with free low-value transactions under a threshold still to be set. Transport: South Africa signed a roughly $400 million deal with US rail giant Wabtec to improve trains carrying minerals and exports, while PRASA added 17 buses to its City-to-City fleet. Local Manufacturing: Government is ending subsidies for imported vehicle kits and tightening assembly rules to push automakers to build more locally. Retail: Famous Brands expects first-half earnings per share to fall by as much as a third, partly after a R40.9 million writedown on its underperforming Botswana business. Water Investment: Rex Trueform says municipal funding gaps and infrastructure backlogs are creating opportunities for private water operators as shortages worsen. Markets: The rand strengthened ahead of South Africa’s crucial budget statement, with the central bank governor saying its resilience is cushioning the country from external shocks.

Manufacturing: Isuzu is investing R30 million in its Gqeberha truck plant ahead of new model launches, as South Africa moves to end support for imported vehicle kits and push manufacturers towards local assembly. Power & transport: Eskom’s proposed average tariff rises of about 8.8% are drawing parliamentary concern over household costs; the increases still need Nersa approval. Transnet, meanwhile, signed a R6.6 billion locomotive-support deal. Economic outlook: Activity dipped 0.4% as fuel costs climbed, while Reserve Bank Governor Lesetja Kganyago says the rand is cushioning external shocks but sees upside risks to inflation. Food costs: The SA Human Rights Commission is examining supermarket pricing and market concentration as hunger persists. Foot-and-mouth disease also remains a concern, with 1,501 outbreaks still listed as unresolved at the end of September. Johannesburg businesses: City Power expects to restore electricity to the inner city and nearby areas by Tuesday after repeated fires and an explosion at the Central Substation.

Markets & Credit: The JSE rose and the rand strengthened, while Moody’s said South Africa is moving towards a possible credit-rating upgrade. But inflation climbed to 2.9%, and rising fuel costs and inflation risks threaten the recovery. Johannesburg Infrastructure: A central-substation explosion prolonged power cuts, forcing manufacturers to spend more on backup fuel. Business Finance: A new report estimates a $209bn funding gap for Black-owned businesses across five African markets; they account for 35% of South Africa’s larger businesses. Energy & Agriculture: Government has warned of a severe El Niño season and urged early water restrictions, while rising diesel costs threaten fruit exports. Industry leaders say local gas alone cannot fill looming supply gaps. Industry & Trade: Government plans to end support for semi-knocked-down vehicle assembly as Chinese exports to South Africa jump 29%, adding pressure on local factories. Transport: Prasa has announced R50bn in upgrades as it pushes to restore rail services and expand bus operations.

Johannesburg Disruption: A central substation explosion has prolonged blackouts in the inner city, adding fresh strain for residents and businesses. Fuel and Inflation: Economic activity dipped 0.4% as fuel costs climbed, while the Reserve Bank governor warned of upside inflation risks. A planned shutdown over fuel taxes underscores the pressure on household budgets. Eskom’s Next Test: Reliability has improved and the utility reported a R30.3bn profit, but high tariffs are driving customers to use less of its power. MPs are challenging a proposed 8% price increase. Industry at Risk: Chrome ore exports rose 28% year-on-year in the second quarter, but ferrochrome exports fell 18%, highlighting the struggle to keep mineral processing and jobs in South Africa. Chinese exports to the country also jumped 29%, raising pressure on local manufacturers. Farming and Energy: Government is preparing drought measures as El Niño threatens key growing regions. Nersa has proposed a dedicated forum to tackle gas supply and infrastructure bottlenecks facing industry.

Industrial Investment: Huaxin is upgrading KwaZulu-Natal’s Simuma cement plant, adding waste-heat power generation and electric mining trucks while training local workers. Economic Pressure: Activity fell 0.4% as fuel costs surged, squeezing businesses and prompting freight operators to seek alternatives. Export Risks: US tariffs have dealt Western Cape exporters an estimated R2.8bn blow. Business Finance: Kholo Capital has backed IT distributor DCC with R275m in funding, while Durban is targeting R95bn in automotive investment. Energy Infrastructure: Eskom is seeking a partner for a 1.5GW pumped-storage project to expand the power system.

Exports: The Western Cape plans to grow annual exports to R408bn and add 1,000 exporters by 2035, while widening access to markets in Europe, Africa and Asia as US exports fade. Fuel Costs: Parliament has advanced a proposed R10bn fuel-relief allocation, but motorists are not guaranteed pump-price cuts; further increases are expected in November. Energy Investment: SANPC chief Godfrey Moagi, newly appointed to lead a forum of African oil-company executives, made getting the Africa Energy Bank operational a priority to finance energy projects and reduce reliance on overseas funding. Retail Risk: Foschini Group says a cyberattack has disrupted some UK systems at Phase Eight, Hobbs and Whistles, though stores remain open and its South African operations are unaffected. Labour: Cosatu delegates elected Mike Shingange president and Zingiswa Losi general secretary, reshaping leadership at a federation representing about 1.6 million members.

Mining and Growth: Mining output fell 12.7% in August, pointing to a drag on third-quarter GDP. The IMF forecasts South Africa’s economy will grow just 1% in 2026. Capital Markets: Glencore began trading in Australia, hoping its new listing will attract up to $5 billion from investors and narrow its valuation gap with BHP. Manufacturing: Chinese imports rose 29% in the first eight months of 2026, intensifying pressure on local factories and manufacturers. Energy Investment: African Energy Week opened in Cape Town with a call for stronger continental cooperation; Eskom is also seeking a partner for a 1.5GW battery-storage project. Corporate Strain: Tongaat Hulett’s 74-year JSE run is ending, with shareholders warned to expect no returns as the sugar producer delists amid business rescue. Retail Risk: Foschini Group is investigating a cyberattack affecting its UK fashion brands.

Power Costs: Eskom’s proposed tariff restructuring faced strong opposition at a NERSA hearing, with speakers warning that it could deepen pressure on low-income households and businesses. If approved, the changes would take effect on 1 April 2027. Food Prices: Chicken import duties are under review, with importers warning that extending or raising them could push prices higher; the poultry industry supports stronger duties. Business Finance: Kholo Capital is providing R275 million in mezzanine financing to ICT distributor DCC Holdings to refinance debt and support growth. Rail Exports: Transnet is upgrading the Sishen–Saldanha iron-ore line during its annual shutdown, aiming to improve reliability and capacity on a key export route. Agriculture: President Cyril Ramaphosa says the government plans to release 2.5 million hectares of state land to black farmers, alongside expanded finance and market access. JSE: Tongaat Hulett has been delisted as its business-rescue process continues, ending a 74-year run on the exchange. Outlook: The IMF has kept its South African growth forecast largely steady, while separate coverage warns that Chinese imports are weighing on local factories.