EDITORIAL: Work with SA’s friends, not against them

If inflation remains stubborn, Reserve Bank governor Lesetja Kganyago can add SA’s increasingly dangerous foreign policy choices to the blame list.  

Adrian Saville, one of the biggest names in SA’s asset management industry, believes the country’s import bill could surge R110bn to R2.3-trillion in 2023 due to the weaker rand.  That means we will pay more for fuel, food, medicine and other essentials.

Already under pressure from the worst electricity outages ever, the rand took a pounding last week by investor concerns over a US allegation that a Russian ship, the Lady R, had picked up weapons at Simon’s Town naval base in Cape Town. The rand was trading at about R19.30 in late afternoon deals on Wednesday, not far from R19.51, its weakest-ever level hit on Friday last week.   

The rand’s weakness has made the governor’s task of combating inflation that much harder, putting pressure on him to keep raising interest rates even as growth tanks. The pain is not confined to corporate boardrooms; it affects real people on the ground, as shown by the data on SA’s unemployment rate, poverty levels and inequality.

We join business leaders such as the CEO of Ninety One, Hendrik du Toit, in urging the government to rethink its foreign policy strategy and to prioritise our economic interests over ideological preferences. We need to work with our friends, not against them.