On January 1, 2024, the price of Petrol Unleaded 93 stood at R22.79 per liter, but by the end of the year, it had dropped to R21.15, reflecting a significant R1.64 decrease. Factors influencing fuel prices include the internal oil price and the exchange rate of the rand against the US dollar, with most crude oil imported and traded predominantly in dollars. When the rand weakens, fuel imports become pricier, leading to increased petrol prices. Conversely, strength seen against the dollar can lead to price cuts.
The rand initially traded at R18.29 to the US dollar, on January 1, when Brent crude oil was priced at $77 per barrel. By April 5, the rand weakened significantly, with oil peaking at $91.17 per barrel. After a favorable general election outcome for South Africa, the rand improved to R17.10, which helped push petrol prices down below R21 per liter by October. Despite this, the rand weakened again toward December 2024, pushing petrol prices to R21.15 as the government announced increases aimed at adjusting to these fluctuations. The average exchange rate in December was R18.11, up from R17.93 the previous month.
South Africa's agricultural sector also holds significant ground as the country braces for recovery thanks to improved rainfall from La Niña conditions. Despite challenges, including crop planting delays and past droughts, conditions are projected to be comparatively favorable for 2025. The Department of Agriculture announced the successful containment of animal diseases like foot-and-mouth disease, which are pivotal for rebuilding the livestock industry.
Reflecting on 2024, the agricultural sector faced adversity yet witnessed resilience through existing frameworks. A mild El Niño brought uncertainty, compounding earlier drought effects from February to March, disrupting crops. Factors like electricity provision significantly benefited the horticulture segment, with irrigation reliant on sufficient power supply.
Trade relations are also pivotal, particularly concerning the African Growth and Opportunity Act (AGOA), recently extended for another year, which bolsters economic ties between the US and South Africa. This extension allows South African fruit growers to benefit from tariff-free imports—a lifeline amid broader uncertainties influenced by political variables surrounding US administrations and foreign policy alignments.
South Africa stands at the threshold of significant change as it prepares to assume the G20 presidency from Brazil in 2025. The G20, which now includes the African Union as its 21st member, presents new opportunities for advocating Africa’s involvement on global issues. Lefentse Nokaneng, Brand South Africa's General Manager, articulated the continent's aspirations, stating, "Our aspirations for Africa have always been clear and compelling."
The G20 presidency offers South Africa the platform to drive discussions on reforms aimed at enhancing Africa's economic potential through mechanisms like the African Continental Free Trade Area (AfCFTA). With proposals aimed at reforming the global trading system and financial architectures, significant discussions around equitable resource allocation are expected. Such initiatives could help address Africa’s infrastructure financing deficit, estimated between $70 to $100 billion—a key obstacle to sustainable development.
While the extension of the AGOA Act provides temporary relief for South African exporters, the looming questions around future trade dynamics remain, especially concerning carbon border adjustments (CBAM) recently proposed by the EU. These initiatives, aimed at aligning trade practices with environmental standards, could drastically alter how South Africa interacts within global markets, being heavily reliant on coal-fired energy.
Heidi Barends, head of sustainable finance at Absa CIB, indicates how South Africa may fall within categories struggling under changing international regulations. There is potential for local manufacturers to adapt by focusing on renewable investments rather than solely relying on traditional sectors. This shift could bolster the economy, increasing job creation and skills development.
Yet the intersection of transitioning to greener policies and economic resilience poses challenges, as many manufacturers currently exhibit high carbon-intensity outputs. If the status quo continues, the South African economy risks stagnation under international pressures. South Africa may well leverage its agricultural strength and tap investment opportunities, promoting industrial diversification by emphasizing growth aligned with the AfCFTA.
This instrumental position within the G20 allows South Africa to advocate for reforms needed to cement its place and influence on the global stage. By uniting local and international entities, the country can carve pathways to improved climate policies, resource mobilization, and impactful governance across Africa, working toward sustainable development goals.
How 2025 will shape the economic outlook remains to be seen, but fostering connections within global dialogues will be key for progress.