Business & Tech News
VAT About-Turn Chaos in South Africa
In a remarkable about-turn, South African National Treasury announced this morning (24 April) that the Finance Minister, Enoch Godongwana, will “shortly” introduce the Rates and Monetary Amounts and the Amendment of Revenue Laws Bill, which will propose to maintain the Value-Added Tax (VAT) rate at 15 per cent from 1 May 2025. There has been an ongoing political battle between the two major Government of National Unity partners, which has brought the coalition to the point of breakdown. The proposed change is a departure from the statements from the finance Minister who stated only days ago that the 0,5% increase could no longer be avoided as there were no alternatives.
Businesses have already prepared for the increases and have spent time and money on getting their systems ready for the increase, and will now need to understand if this is now a permanent position. In a statement released, the finance ministry said that “The decision to forgo the increase follows extensive consultations with political parties, and careful consideration of the recommendations of the parliamentary committees,” it said. The Minister of Finance expects to introduce a revised version of the Appropriation Bill and Division of Revenue Bill within the next few weeks, which will address the budget changes needed to reduce spending to account for the shortfall. There is also speculation that the VAT debacle may make the Minister’s position untenable and that he may be replaced.
Tech War Threatens As European Court Fines US Tech Giants:
Following a year-long investigation by the European Commission regarding compliance shortfalls of the Digital Marketing Act in Europe, both Apple and Meta have now been issued fines of $570 million and $227 respectively yesterday. This was the first ever sanction to be meted out by the European Union antitrust regulators under landmark regulations that were implemented to curb the increasing dominance and monopolies of Big Tech. The sanctions, while not unique to Europe, may raise tensions with U.S. President Donald Trump, who has recently threatened to levy tariffs against countries that penalise U.S. companies as retaliation for the tariffs implemented by the US administration. The The White House has called the fines a “novel form of economic extortion” that the United States will not tolerate. The fines signal that the EU is staying the course regarding the new regulations, introduced in 2023.
New Chinese Bond Launched:
China has released its first batch of special sovereign bonds for 2025, with the goal of cushioning the economy against escalating trade tensions with the U.S. The Chinese Ministry of Finance plans to raise S$51.6 billion via a three-part issuance to fund a fiscal package approved in March. Unlike regular sovereign debt, special bonds are earmarked for specific purposes and do not count toward China’s record-high 4% fiscal deficit target.
The issuance includes 165 billion Chinese Yuan (CNY) in five-year bonds to inject capital into struggling state-owned banks, which are facing shrinking profit margins. China also plans to issue CNY 50 billion in 20-year bonds and CNY 71 billion in 30-year bonds. This is part of a broader plan to sell CNY 500 billion of such bonds by June 4, and CNY 1.3 trillion in ultra-long special sovereign notes through October. The move underscores Beijing’s push to boost spending and defend its 5% growth target amid looming 145% U.S. tariffs.
Business & Market News Shorts:
- The IMF now anticipates global public debt to jump 2.8 percentage points this year, more than twice what it estimates for 2024. That would push global government debt above 95% of gross domestic product, the Washington-based lender said in its latest Fiscal Monitor, published yesterday.“This upward trend is likely to continue, with public debt nearing 100% of GDP by the end of the decade, surpassing pandemic levels,” the IMF said.
- The National Power Utility in South Africa, Eskom, appears to be set to turn its financial situation around after receiving a bailout of R254 billion over the last three financial years. Director Jeffrey Quvane stated that Eskom is expected to reflect a profit once its 2024 financial records are audited.
- SK Hynix, a central Nvidia supplier that provides high-bandwidth memory processors to the global chip giant, announced a quarterly profit that more than doubled, with demand for AI chips so robust that it anticipates limited impact on their products from potential U.S. tariffs.
- South African (SA) Minister of Trade, Industry, Ebrahim Patel, is set to hold his first informal meeting with a US trade representative on Friday. This meeting is the first effort by the SA administration to try rectify shaky relations with the US, after US President Donald Trump’s announcement that he would impose 30% tariffs on South African imports as part of a global trade realignment strategy. The US is SA’s second-largest trading partner.
- South Korea’s data protection authority said on Thursday that Chinese artificial intelligence startup DeepSeek transferred user information and prompts without permission when the service was still available for download in the country’s app market. DeepSeek has not responded to the allegations as yet.
Markets by Numbers
Currencies:
Currency markets are indicating the US Dollar has gained against the main global currencies, and is currently up against the Euro, at 1.13571, and trading slightly stronger against the Pound at 1.32764. The Yen is trading lower at 142.60 to the dollar currently. The rand has maintained its narrow range against the dollar around the R18.50 to R18.60 level, and is trading at R18.58 to the US dollar currently.
Commodities:
- Gold futures prices have gained slightly today and are currently trading at $3338 per ounce.
- Copper prices are trending upwards today, and are currently at 4.8483.
- Silver futures prices are trading downwards this morning and are at 33.458 currently.
- Platinum continues to trade higher today and at $972.50 currently, while Palladium prices are also trending higher and at $928.00 currently.
- Brent Crude Oil prices have modulated and are at $66.52, with WTI also trading upwards at $62.85.
- Cocoa futures are currently trading upwards today, and at $9252 per ton.
- Coffee futures prices are trending upwards and are at $379.00 currently.
Crypto Currencies:
- Bitcoin prices have lost just over -1% this morning and are currently trading at $92580
- Ether prices are also trading over -1,7% lower this morning and at $1770 currently.
- $Trumpcoin has surged again and is currently trading at $12.43
(All prices quoted at approximately 09H20 – Central African Time)
Other Breaking News in Africa Today
Ukraine’s President Zelensky in South Africa Today:
The Ukrainian President Volodymyr Zelensky, will touch down in Johannesburg for his first presidential visit to Africa today. Zelensky is set to hold discussions with South African President Cyril Ramaposa, to find a path to a cessation of hostilities between Russia and Ukraine. Ramaposa has had a call with Russian President Vadlimir Putin this week, when, according to a statement released by the Kremlin, Putin had outlined his conditions for a peace accord with Ukraine. The statement said that “Vladimir Putin outlined Russia’s principled stance regarding the necessity to eliminate the root causes behind the conflict and ensure Russia’s security interests are respected,”.
Russia has held a position for decades that it would refuse to accept Ukraine becoming part of the NATO alliance, and it seems unlikely that this would have changed. However, with US negotiations with Ukraine and the alliance that South Africa has with Russia within the BRICS group of nations, it is hoped that a basis for a peaceful settlement of the conflict could be found.
France Speaks Out on Tunisian Authoritarian Regime:
France has criticised the lengthy sentences handed down by a Tunisian court against opposition leaders and businessmen on conspiracy charges over the past weekend, stating that the conditions for a fair trial were not met. The comments by the French Administration is the first to speak out on the trial, and came amid growing criticism of the government of President Kais Saied over its crackdown on political opposition and its authoritarian stance on any dissent.
