South Africa will need to perform some fancy and hitherto unseen diplomatic footwork vis-à-vis the Iranian war; John Steenhuisen’s department is to brief the nation on how it’s containing the vicious foot-and-mouth outbreak; and on Wednesday we’ll know how well South Africa did to grow the economy in the last quarter.
Politics
US and Israel/Iran conflict
Like many, the South African government will be seeking to navigate the fallout of the war against Iran launched by the US and Israel on Saturday morning. Through presidential spokesperson Vincent Magwenya, Cyril Ramaphosa on Saturday called for all parties to exercise “maximum restraint and to act in a manner consistent with international law”.
South Africa will have to tread a very careful line on this issue following repeated tensions with the US and the debacle surrounding Iran’s participation in January’s “Will for Peace” naval exercise.
Parliament
It’s a busy week in parliament, with multiple portfolio committees meeting. On Tuesday, the department of agriculture will be briefing the agriculture portfolio committee on the status of the foot-and-mouth disease outbreak in the country.
On Wednesday, the police portfolio committee will receive a briefing by the South African Police Service on the deployment of the army in support of its operations in the Eastern Cape, Gauteng and Western Cape (as announced by Ramaphosa in his state of the nation address).
DA leadership race intensifies
Following the opening of nominations on February 27, the race for elected positions available at the DA’s April federal congress will intensify this week, with endorsements and further nominations.
On Friday, Geordin Hill-Lewis indicated he would run for federal leader. Solly Msimanga announced that he would be running for federal chair against incumbent Ivan Meyer. Ashor Sarupen announced his nomination for chair of the federal council, the position being left vacant by Helen Zille as she focuses on her Joburg mayoral race. Sarupen is likely to contest Werner Horn for the position.
Erik Marais has thrown his hat in the ring for chair of the federal finance committee. Basic education minister Siviwe Gwarube has confirmed she will contest for one of the three deputy federal chair positions together with Solly Malatsi, Cilliers Brink and Anroux Marais.
Limpopo and Mpumalanga Sopas
Limpopo premier Phophi Ramathuba and Mpumalanga premier Mandla Ndlovu will deliver their respective state of the province addresses on Thursday.
Economics
Manufacturing PMI (February)
The week’s beat of data drops begins early on Monday with the release of February’s manufacturing PMI. Previously at 48.7, the index has remained in contractionary territory, and the latest reading is likely to be scrutinised for signs that industrial activity is edging back towards expansion. In the wake of last week’s budget, which rests on a gradual strengthening in growth to support revenue and stabilise debt, the print carries added significance.
A move closer to, or above, the 50 mark would reinforce the view that easing electricity constraints and improved logistics are beginning to translate into firmer factory output. A softer outcome, however, would sit uneasily with Treasury’s growth assumptions and raise fresh questions about the pace at which supply-side improvements are feeding through to the real economy.
Total vehicle sales (February)
Later on Monday, attention turns to the February vehicle sales print. The release is set to show growth of about 5.2% year on year, extending the recent improvement in passenger vehicle demand. Lower interest rates, improving consumer confidence and the continued influx of more affordable imported models are likely to remain supportive.
The data will be read as a real-time gauge of household spending momentum. A firm print would suggest consumers are responding to easing financial conditions, lending weight to the expectation that domestic demand can shoulder more of the growth burden this year. A weaker outcome, however, would temper optimism about the strength of consumer spending.
Fourth-quarter GDP
Midweek, the focus shifts squarely to Wednesday’s fourth-quarter GDP release. The quarter-on-quarter annualised figure was previously 0.5%, while year-on-year growth stood at 2.1%, providing a modest base heading into the new year. While the external backdrop remains uncertain and logistical constraints have not fully dissipated, the broader trajectory points to a gradual improvement in activity and another modest uptick in Q4.
The read-out will test the credibility of Treasury’s growth assumptions. A weaker outcome would put the growth outlook back under the spotlight and renew questions about whether reforms are moving fast enough to lift the economy.
This article is published courtesy of The South Africa Brief, a political newsletter published on Substack which is a collaboration between Paul Berkowitz and Jonathan Moakes. It provides analysis and insight into the new, uncertain era of South African politics heralded by the 2024 general election. Including a specific focus on municipal politics, it will provide full analysis in the run-up to this year’s municipal polls.
Top image: Rawpixel/Currency collage.
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