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THE BRIEF: Starlink coming to SA? Goodbye ANC

The week behind

Hello from Johannesburg,

A bold decision this past week from South Africa’s Minister of Communications and Digital Technologies, Solly Malatsi.

Malatsi has instructed the telecommunications regulator, ICASA, to drop its equity requirements in favour of a model that allows companies like those owned by Elon Musk to invest in South Africa.

It’s refreshing to see some rational policymaking. Pressure from President Donald Trump appears to be influencing the Ramaphosa administration—at least to some degree. BEE no longer makes sense in our current economic climate. We can create opportunities, reduce poverty, and grow the economy without it.

I doubt Malatsi acted without President Ramaphosa’s knowledge. If this decision stands and is implemented, it will be good for South Africa. Our economy is stagnant and desperately needs investment. Race‑based equity requirements are counterproductive. On this decision, Minister Malatsi has my full support. Unsurprisingly, the ANC is already denouncing his directive.

The other major political event of the past week was the African National Congress (ANC)’s National General Council in Boksburg. Local media covered it extensively, but—as with most ANC gatherings—the NGC offered little of substance.

Whenever the ANC takes centre stage, I look for signs of fresh thinking or bold ideas. Instead, we hear the same tired rhetoric from a bygone era. South Africa needs a fresh start and new priorities, and that cannot happen while the ANC remains dominant. Even the party’s own leaders now concede that its support is slipping. The latest Social Research Foundation (SRF) poll places the ANC at 37%, down from the 41% it received in last year’s election, while the DA has risen to 32% from 22%. Yet despite its decline, the ANC insists on clinging to BEE, NHI, and other counterproductive policies.

On the economic front, consumer confidence improved in the third quarter, rising to -9 points from -13 points in the second quarter. Markets have been positive on South Africa this year, reflected in the strong performance of South Africa’s stock market.

Business confidence also ticked up to its highest level since 2011 in November, boosted by tourism. Encouragingly, South Africa’s inflation expectations have fallen significantly after Finance Minister Enoch Godongwana lowered the inflation target, creating room for additional interest rate cuts. Respondents—including trade unions, analysts, and business leaders—now forecast headline inflation at 3.8% next year and 3.7% in the years that follow, the lowest levels on record. This is down from 4.2% in both years previously.

The key statistic I’ll be watching over the next two quarters is fixed investment as a percentage of GDP. The last quarter showed improvement, but we need to see whether this momentum holds. Fixed investment is what drives sustained economic growth.

The week ahead

We have significant economic data coming up. The South African Reserve Bank (SARB) will release its quarterly bulletin covering the three months to October. The bulletin always contains valuable macroeconomic insights—from growth and unemployment to trade data. We will also receive last month’s inflation figures on Wednesday and the latest producer price inflation (PPI) numbers on Thursday.

Unlike four years ago, when PPI was in double digits, the situation is far more stable today. Although PPI rose from 2.3% in September to 2.9% in October year‑on‑year, it actually declined by 0.1% month‑on‑month. Economists are not particularly concerned at this stage.

I will continue to track these developments and share my reflections with you each week.

Have a great week ahead. PM #markets #politics #economy #macro #MajoziCommentary

Purchase Phumlani’s book, Lessons from Past Heroes, on Takealot. It will make a great Christmas gift.

© PHUMLANI M. MAJOZI