South African business sentiment rose to its highest level during 2024, as constant electricity supply and political stability supported better business conditions. The challenge this year will be to translate sentiment to action. This will hinge on greater collaboration between policy makers, the private sector and key arms of government. The rewards – economic growth, job creation and improved quality of life – will be well worth the effort.
It is generally accepted that the de-industrialisation trajectory that has been observed in the sector can be attributed to the lack of a well-considered and all-encompassing metals sector industrial policy. The South African steel industry is eager to collaborate with the government to ensure that policy decisions are made in the best interest of the industry and the nation. A holistic approach that protects the diversity and sustainability of the entire steel value chain is essential for the future success of the South African steel industry.
Looking further afield, the global stage is likely to take the focus at the start of the year when Donald Trump returns to the White House as President of the United States. He has already indicated that global trade is set for some turbulence as he implements policy changes, particularly tariff increases. He has also made it clear that the BRICS nations are in his crosshairs, threatening to impose 100% tariffs on the countries if the bloc chooses to develop a currency to rival the dollar.
Other ongoing geopolitical challenges include intractable conflict in the Middle East, between Hamas and Israel, and Europe, between Russia and Ukraine, resulting in global uncertainty.
The relief felt by the whole country from the suspension of load-shedding in 2024 we hope will flow into 2025. The utility’s Generation Operational Recovery Plan appears to have delivered on its promise and we hope this will be seen in robust economic growth. More stable electricity supply and falling rates have allowed the International Monetary Fund to raise its forecast for GDP growth to 1.1% growth for 2024 and 1.5% in 2025, increasing further to 1.8% by 2030, while the South African Reserve Bank expects growth to be 2% by 2027. The concrete steps to get there will be laid out by the president’s State of the Nation address and the national budget, both in February.
Unemployment remains a massive obstacle. The rate decreased by 1.4 percentage points to 32.1% in the third quarter of 2024, according to the Quarterly Labour Force Survey, with 294,000 more employed people to 16.9 million and a decrease of 373,000 unemployed people to 8 million. While the movement is in the right direction the rate is still cripplingly high. Until strong growth is achieved and sustained, joblessness will continue to plague the economy. This is one of the many challenges that can be best addressed through private-public partnerships.
The European Union’s Carbon Border Adjustment Mechanism (CBAM) programme will be in place by 2026, so 2025 will be the final year of the transitional phase. SEIFSA will keep the M&E Sector informed of any developments and encourage it to adopt a proactive approach to the initiative.
Returning back home, SEIFSA for and on behalf of its membership and the broader metals, engineering and steel industry, representing both the up and downstream value chain reiterates it call to government to priorities a long-term, inclusive strategy for the steel industry. A collaborative approach that considers all stakeholders is essential to securing the future of South Africa’s steel industry and its critical role in economic development.
SEIFSA will ensure that the concerns of the sector remain on the agenda in 2025 – in the media and in meetings with stakeholders – while maintaining its collaborative relationship with government, working together to set the economy on a road to sustained recovery.
We look forward to another year as the voice of our diverse membership and ensuring that policy decisions are made with the best interests of the sector at heart.
