Political and trend analyst JP Landman criticises the ignorance of geopolitical minds and the economics profession regarding each other's fields, highlighting the need to integrate economics and foreign policy. The economic consequences of South Africa's foreign affairs decisions are poorly understood, as are the country's geopolitical considerations. The potential damage to the South African economy from disputes with the US is analysed through four transmission channels: currency, trade and supply chains, investment, and liquidity. South Africa's economic integration with the West is evident, but its political alignment with BRICS and the Global South complicates decision-making. The author points out the contrasting behaviour of India and Brazil in responding to the Russia–Ukraine war and highlights South Africa's perceived alignment with Russia. Balancing economic and political interests is crucial, with the ultimate goal of addressing poverty, unemployment, and inequality. Click here to read or listen to the full article by JP Landman.

In her speech at the European Central Bank Forum, Gita Gopinath, deputy managing director of the International Monetary Fund (IMF), acknowledged that the battle against inflation was ongoing and she discussed three uncomfortable truths for monetary policy. The first truth is that inflation is taking too long to return to target, despite optimistic forecasts. The second truth is that financial stresses could generate tensions between central banks' price and financial stability objectives. The third truth is that central banks are likely to face more upside inflation risks than before the pandemic. She emphasised the need for central banks to continue fighting inflation and refine their policy strategies to address these challenges. Additionally, the role of fiscal policy in supporting inflation-fighting efforts and strengthening the EU framework is highlighted. She concluded by emphasising the importance of risk management and adjusting monetary policy in response to changing inflation dynamics. Read or watch the full presentation by Gita Gopinath here. 

The implementation of the African Continental Free Trade Area (AfCFTA) received a boost with the signing of a Memorandum of Understanding (MoU) between the United States (US) Trade Representative and the AfCFTA Secretariat. The MoU aims to promote trade, competitiveness, and investment between the two regions. The US also announced its intention to invest USD 55 billion in Africa over the next three years, with a focus on key sectors such as sustainable energy, health systems, agribusiness, digital connectivity, infrastructure, and finance. The US has been strengthening its trade partnership with Africa through initiatives like Prosper Africa, which supports reciprocal trade and investment. Trade agreements between the US and African countries will align with AfCFTA stipulations and may include climate change provisions. The US–Kenya Strategic Trade and Investment Partnership (STIP) was signed, focusing on increased investment and regional economic integration. The US aims to further enhance engagement and trade opportunities in Africa, building on the success achieved thus far. Click here to read more.

The Transnet National Ports Authority (TNPA) has unveiled Port Development Framework Plans, outlining a R13-billion investment in South Africa's commercial seaports over the next five years. The goal is to enhance capacity and ensure long-term sustainability. The plans were formulated through extensive public participation and will serve as a guide for port infrastructure development. Regular reviews will be conducted to maintain alignment with international best practices. Specific initiatives include establishing the Port of Port Elizabeth as an automotive hub, relocating manganese and liquid bulk facilities to the Port of Ngqura, expanding the South Dunes liquid bulk terminal in Richards Bay, maintaining the Port of Durban as a regional container hub, acquiring land for expansion in the Port of Mossel Bay, developing the Culemborg logistics park in Cape Town, and providing liquefied natural gas facilities in Saldanha Bay. Click here to read the full article, first published on Engineering News, and the plans can be found on the TNPA website. 

The business council of the BRICS group gathered virtually in May to discuss priorities for the year, in preparation for the summit in August. The business council works collaboratively with the political heads and primarily focuses on commercial opportunities. South Africa, the BRICS chair this year, led the meeting and proposed the areas of focus. Within the agribusiness working group, which Agbiz chief economist, Wandile Sihlobo, chairs, there are five priority areas: Best practices on agriculture sustainable development. All the BRICS members are major agricultural countries and agricultural production faces significant challenges in tackling climate change. This workstream is crucial and will build on the work already started by the China chapter in 2022. Improve fertiliser availability in BRICS countries and the broader African continent. Click here to read the full article by Wandile Sihlobo first published in the Sunday Times. 

South Africa's agricultural sector had a rough start to the year regarding production and exports. The excessive rains brought production challenges that delayed the summer crop planting activity by roughly a month but later improved. Regarding exports, the slowing agricultural commodity prices reduced profitability from the levels farmers enjoyed a year ago, specifically grains and oilseeds. Moreover, some logistical challenges persisted in the Port of Cape Town and thus negatively affecting the table grapes and various horticultural products exports. Still, this was not as harsh as in the previous years. The cooperation between organised agriculture groups and Transnet has helped improve agricultural export efficiencies somewhat. With that said, there is still room for improvement, which is essential for all the ports as South Africa has an export-oriented agricultural sector. Click here to read the full article by Wandile Sihlobo.

South Africa had a challenging start to the 2022/23 summer crop season. Excessive rains slowed the planting activity in various regions from October 2022 when the season started to the end of the year. Thus, the crop was planted roughly over a month behind the typical planting window in some areas. It was only around late January 2023 that all plantings were completed. The late plantings also raised fears of possible poor yields, as some feared the crop would be negatively affected by frost later in the season. Another challenge was the intensified load-shedding and its impact on production, mainly for areas under irrigation, about 20% of maize and 15% of soybean production. Read the full article by Wandile Sihlobo here.

Transnet Port Terminals (TPT), Transnet Freight Rail (TFR), and Maersk have collaborated successfully on a road-to-rail initiative during the citrus season in the Eastern Cape terminals. This effort aims to reduce congestion at the Ngqura Container Terminal (NCT) by using rail transport for empty reefer containers, improving business fluidity. The first Maersk reefer shuttle train, carrying 50 empty reefers, departed from NCT on 8 June 2023, marking a significant milestone for the two-year collaborative initiative. By utilisng rail transport, the initiative aims to mitigate congestion at NCT and enhance overall business operations, while reducing truck traffic and promoting safer roads. This collaboration exemplifies the commitment to innovative solutions benefiting the industry and the local community. Read the full article first published on FreshPlaza.com here.

Theo Boshoff, CEO of Agbiz, recently joined a panel of esteemed experts on Plaas TV to engage in a comprehensive discussion on the detrimental effects of load-shedding, specifically in relation to its job-killing impact. The significance of the agricultural sector in bolstering the nation's economy is once again highlighted by the latest Quarterly Labour Force Survey results. These results emphasise the pressing need to safeguard the sector from the adverse consequences brought about by load-shedding. The panel of experts provided valuable insights and analysis on this pressing matter during their appearance on Plaas TV. Watch the full discussion here. 

The El Niño-Southern Oscillation (ENSO) is transitioning into El Niño-like conditions and is expected to persist through most of the summer, though its duration is uncertain. Close monitoring of ENSO is recommended. The current forecast period shows limited impact until the summer season, which is likely to be influenced by a moderate to strong El Niño. The multi-model rainfall forecast predicts above-normal rainfall for most of the country in winter and early spring, with below-normal rainfall in certain western and eastern regions during mid-spring. Above-normal temperatures are expected nationwide. The South African Weather Service will continue monitoring and providing updates for the upcoming season. Read the full report by the South African Weather Service here.

The Citrus Growers' Association of Southern Africa (CGA), shares the latest news in the citrus industry in its weekly update, From the desk of the CEO. Please click here to peruse.