Business remains relatively quiet as it is still being impacted by higher interest rates and reduced demand, as well as by the daily load shedding which continues to affect the economy, especially manufacturing industries and distribution. Public utility Eskom is continuing to struggle with maintenance and breakdowns at its power stations but hopefully this situation will improve in 2024.
The prime lending rate is 11.75% at present and the outlook for the balance of 2023 is for the same. This could be reduced in early 2024 amid concerns about inflation and the price of oil which is currently trading at around US$ 95 per barrel. South Africa’s PMI numbers were worse than expected in dropping for the eighth consecutive month from 49.7 in August to 45.4 in September.
Meanwhile, there is deep concern about local and national/government debt levels and also about state-owned enterprises such as Eskom, Transnet and the Post Office.
As previously reported, South Africa’s ban on exports of copper, brass, gunmetal and ferrous scrap has been extended for a further six months until the end of 2023. Aluminium and stainless steel scrap can still be exported through the International Trade Administration Commission but permits will be granted only if there are no objections from local consumers. In instances where a permit is granted, the export tax must be paid before shipping the material.
At the time of writing, the local currency is trading at 19.30 to the US dollar.