South Africa’s economy at a pivotal point as outlook improves but political, energy risks remain
LONDON – South Africa’s President Cyril Ramaphosa speaks during a press conference in central London on November 24, 2022
JUSTIN TALLIS/AFP via Getty Images
South Africa’s long-awaited economic reforms have begun to improve the country’s outlook, but the age-old problems of political uncertainty and a failing power system still pose significant risks.
The Economic Reconstruction and Recovery Plan has been a key tenet of President Cyril Ramaphosa’s agenda since he succeeded Jacob Zuma as the country’s leader in 2018. But deep divisions within the ruling African National Congress (ANC) and his own cabinet have made for sluggish progress.
The suite of reforms — focused on energy security, infrastructure development, food security, job creation and the green transition — is designed to create a “sustainable, resilient and inclusive economy,” the government says.
And — some at least — appear to be working. S&P Global Ratings earlier this month affirmed its positive outlook on the country, saying that government measures to stimulate private sector activity could boost growth, and the measures had the potential to ease economic pressures.
“There is some hope in the public finances in South Africa, mainly due to the increase in government revenues as a result of higher commodity exports, and also due to the progress made in reducing debt and debt distress, and to ushering a public deficit,” Aleix Montana, Africa analyst at risk consultancy Verisk Maplecroft, told CNBC last week.
However, political frailties and persistent issues at a state-owned utility continue to pose present economic risks.
Ramaphosa faces a “perfect storm of inflation, electricity cuts and corruption accusations that will continue to deteriorate South Africa’s profile and to pose risk for investments in the country,” Montana said.
A report into an alleged corruption scandal surrounding Ramaphosa is set to be examined by the National Assembly on Dec. 6, just 10 days before the party conference of his ruling ANC (African National Congress).
Energy woes
Though Ramaphosa is expected to secure a second five-year term, Montana said he will have to improve his credibility on economic and anti-corruption reforms in order to continue pushing through his agenda. The economy also remains at risk from persistent disruptions at state-owned companies, such as power utility Eskom.
South Africans have faced rolling blackouts as Eskom — which has long been a thorn in the side of the country’s economy — contends with shortfalls in generation capacity due to equipment failures and diesel shortages.
The company has warned that power outages, known as “load-shedding,” will continue for the next six to 12 months, and recently said it had run out of funds to acquire the diesel needed to run auxiliary power plants that are deployed during periods of peak consumption or emergencies.
Montana said that in order to secure sustained economic growth, the South African government will need to prioritize energy sustainability.
“Energy will require financial assistance from international players, but they will also need to ensure that it doesn’t have a negative impact on South African society,” he said.
“Apart from financial challenges, a lot of citizens of South Africa are employed in Eskom or in the fossil fuels sector, so the government will need to ensure that in their plan, they mitigate this potential impact of transitioning from a fossil fuels-based economy to the implementation of renewables in order to sustain electricity stability.”
Asked about this issue on a recent state visit to the U.K., Ramaphosa told CNBC’s Arabile Gumede that the problems at Eskom started long before 2014, when former President Jacob Zuma appointed him to address the country’s energy problems.
“As we are generating electricity, power stations keep breaking — many of them are old — but we are trying with a new boat, the management that’s in place to address this problem,” Ramaphosa said.
“So the problems of Eskom were seeds that were planted many years ago, rather than in 2014, and because we’re dealing with huge, complicated and complex machinery, it’s not a one-day fix, it can never be as these are very complex processes.”
He added that the government was working to reduce load-shedding requirements and to “ensure that the money’s there,” noting that Eskom “used to be the best utility in the world.”
“Do I have confidence that we will solve these problems? Yes, I do. I do have enormous confidence that we will solve them,” he said.
“But I think it’s important to have an appreciation of where we’ve come from, and obviously, it is very easy to put all the blame on the president, to put all the blame on the government, and yet these problems have come way back from the past.”
‘Taming the monster’ of inflation
Along with the domestic issues unique to South Africa, the country also faces the same inflationary pressures that have plagued economies around the world over the past year.
Annual headline inflation rose to 7.6% in October, defying the South African Reserve Bank’s expectations for price pressures to ease. This prompted the bank’s Monetary Policy Committee to hike interest rates by an aggressive 75 basis points last week, taking the benchmark repo rate to 7%.
This marked the seventh consecutive meeting at which monetary policy had been tightened, and central bank Governor Lesetja Kganyago said in a press conference that it must “tame the monster of inflation.”
With prices rising much faster than the central bank’s 3-6% target, Kganyago noted that the SARB needs to see clear evidence that inflation has not just peaked, but begun to sustainably decline toward the midpoint of the range.
But further monetary tightening will place additional pressure on the economy.
“We think that inflation is unlikely to return within the target range (let alone the midpoint) in the coming months, keeping policymakers in tightening mode well into 2023,” said Virág Fórizs, emerging markets economist at Capital Economics.
She flagged that food inflation continues to increase, offsetting some of the effects of softening fuel price pressures, while core inflation is likely to remain high. Capital Economics expects inflation to hover around 7.5% annually until early 2023, before dropping markedly around the middle of the year.
Fórizs said the weakness of the economy is unlikely to prevent further rate hikes, with growth concerns playing second fiddle to inflation worries. South African GDP contracted by 0.7% in the second quarter.
“While the end of the tightening cycle is not yet in sight, we expect the pace of tightening to slow over the next MPC meetings,” she noted.
Three MPC members voted to hike rates by 75 basis points last week, while two voted for 50 basis points. It marked an apparent softening of approach by some who voted for a 100-basis-point rise at the previous meeting.
“All in all, we’ve penciled in 100bp of further increases in the repo rate, to 8.00%, by Q2 2023,” Fórizs said.
Environment
EcoFlow members can save up to 65% on power stations while supporting disaster relief during the 2025 Member’s Festival
Portable power station specialist EcoFlow is kicking off its third annual Member’s Festival this month and is offering a unique new rewards program to those who become EcoFlow members. The 2025 EcoFlow Member’s Festival will offer savings of up to 65% for its participating customers, and a portion of those funds will be allocated toward rescue power solutions for communities around the globe through the company’s “Power for All” fund.
EcoFlow remains one of the industry leaders in portable power solutions and continues to trek forward in its vision to power a new tech-driven, eco-conscious future. Per its website:
Our mission from day one is to provide smart and eco-friendly energy solutions for individuals, families, and society at large. We are, were, and will continue to be a reliable and trusted energy companion for users around the world.
To achieve such goals, EcoFlow has continued to expand its portfolio of sustainable energy solutions to its community members, including portable power stations, solar generators, and mountable solar panels. While EcoFlow is doing plenty to support its growing customer base, it has expanded its reach by giving back to disaster-affected communities by helping bolster global disaster response efforts the best way it knows how– with portable power solutions.
EcoFlow and its members look to provide “Power for All”
Since 2023, EcoFlow has collaborated with organizations worldwide as part of its “Power for All” mission. This initiative aims to ensure access to reliable and timely power to disaster-affected communities across the globe, including rescue agencies, affected hospitals, and shelters, to support rescue and recovery efforts.
This fund most recently provided aid for communities affected by the recent Los Angeles wildfires, assistance to the Special Forces Charitable Trust (SFCT) in North Carolina following severe hurricanes, and support for non-profits engaged in hurricane preparedness in Florida and the Gulf Coast. Per Jodi Burns, CEO of the Special Forces Charitable Trust:
In the wake of devastating storms in Western North Carolina, reliable power was a critical need for the families we serve. Thanks to EcoFlow’s generous donation of generators, we were able to provide immediate relief, ensuring these families and their communities had access to power when they needed it most. We are so impressed with EcoFlow’s commitment to disaster response through their ‘Power for All’ program. It has made a tangible impact, and we are deeply grateful for their support and partnership in helping these families recover and rebuild.
In 2024, the US experienced 27 weather and climate events, each causing losses exceeding $1 billion, marking the second-highest annual total on record, according to National Centers for Environmental Information. The increasing frequency and severity of natural disasters underscore the critical need for reliable and timely power solutions during emergencies, much like EcoFlow and its members are helping provide through the “Power For All” initiative.
To support new and existing EcoFlow members, the company is celebrating its third annual Member’s Festival throughout April to offer a do-not-miss discount on its products and donate a portion of all sales to the “Power for All” fund to provide rescue power to those in need in the future. Learn how it all works below.
Save big and give back during the 2025 Member’s Festival
As of April 1st, you can now sign up to become an EcoFlow member to participate in the company’s exclusive 2025 Member Festival.
As a member, you can earn “EcoFlow Power Points” by completing tasks like registration, referrals, and product purchases and tracking your individual efforts toward disaster preparedness and recovery.
Beginning April 4, EcoFlow members will also be able to take advantage of exclusive discounts of up to 65% off select portable power stations, including the DELTA Pro Ultra, DELTA Pro 3, DELTA 2 Max, DELTA 3 Plus, RIVER 3 Plus, and more. However, these sale prices only last through April 25, so you’ll want to move quickly!
Click here to learn more about EcoFlow’s “Power for All” campaign. To register for EcoFlow’s 2025 Member Festival in the US, visit the EcoFlow website. To register as a member in Canada, visit here.
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Tesla is losing another top talent: its long-time head of software, David Lau, has reportedly told co-workers that he is exiting the automaker.
Tesla changed how the entire auto industry looks at software.
Before Tesla, it was an afterthought; user interfaces were rudimentary, and you had to go to a dealership to get a software update on your systems.
When Tesla launched the Model S in 2012, it all changed. Your car would get better through software updates like your phone, the large center display was responsive with a UI that actually made sense and was closer to an iPad experience than a car.
Tesla also integrated its software into its retail experience, service, and manufacturing.
David Lau deserves a lot of the credit for that.
He joined Tesla in 2012 as a senior manager of firmware engineering and quickly rose through the ranks. By 2014, he was promoted to director of firmware engineering and system integration, and in 2017, he became Vice President of software.
Lau listed the responsibilities of his team on his LinkedIn:
- Vehicle Software:
- Firmware for the powertrain, traction/stability control, HV electronics, battery management, and body control systems
- UI software and underlying Embedded Linux platforms
- Navigation and routing
- iOS and Android Mobile apps
- Distributed Systems:
- Server-side software and infrastructure that provides telemetry, diagnostics, over-the-air updates, and configuration/lifecycle management
- Data engineering and analytics platforms that power technical and business insights for an increasingly diverse set of customers across the company
- Diagnostic tools and fleet management, Manufacturing and Automation:
- Automation controls (PLC, robot)
- Server-side manufacturing execution systems that power all of Tesla’s production operations
- Product Security and Red Team for software, services, and systems across Tesla
Bloomberg reported today that Lau told his team he is leaving Tesla. The report didn’t include reasons for his stepping down.
Electrek’s Take
Twelve years at any company is a great run. At Tesla, it’s heroic. Congrats, David, on a great run. You undoubtedly had a significant impact on Tesla and software advancements in the broader auto industry.
He is another significant loss for Tesla, which has been losing a lot of top talent following a big wave of layoffs around this time last year.
I wonder who will take over. Michael Rizkalla, senior director of software engineering and vehicle firmware, is one of the most senior software engineers after Lau. He has been at Tesla for 7 years, and Tesla likes to promote within rather than hire outsiders.
There are also a lot of senior software execs working on AI at Tesla. Musk has been favoring them lately and he could fold Lau’s responsibilities under them.
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Kia’s electric SUVs are taking over. The EV3 is the best-selling retail EV in the UK this year, giving Kia its strongest sales start since it arrived 34 years ago. And it’s not just in the UK. Kia just had its best first quarter globally since it started selling cars in 1962.
Kia EV3 is the best-selling EV in the UK through March
In March, Kia sold a record nearly 20,000 vehicles in the UK, making it the fourth best-selling brand. It was also the second top-seller of electrified vehicles (EVs, PHEVs, and HEVs), accounting for over 55% of sales.
The EV3 remained the best-selling retail EV in the UK last month. Including the EV6, three-row EV9, and Niro EV, electric vehicles represented 21% of Kia’s UK sales in March.
Kia said the EV3 “started with a bang” in January, darting out as the UK’s most popular EV in retail sales. Through March, Kia’s electric SUV has held on to the crown. With the EV3 rolling out, Kia sold over 7,000 electric cars through March, nearly 50% more than in Q1 2024.
The EV3 was the best-selling retail EV in the UK in the first quarter and the fourth best-selling EV overall, including commercial vehicles.
Starting at £33,005 ($42,500), Kia said it’s the “brand’s most affordable EV yet.” It’s available with two battery packs, 58.3 kWh or 81.48 kWh, good for 430 km (270 miles) and 599 km (375 miles) of WLTP range, respectively.
With new EVs on the way, this could be just the start. Kia is launching several new EVs in the UK this year, including the EV4 sedan (and hatchback) and EV5 SUV. It also confirmed that the first PV5 electric vans will be delivered to customers by the end of the year.
Electrek’s Take
Globally, Kia sold a record 772,351 vehicles in the first quarter, its best since it started selling cars in 1962. With the new EV4, the brand’s first electric sedan and hatchback, launching this year, Kia looks to build on its momentum in 2025.
Kia has also made it very clear that it wants to be a global leader in the electric van market with its new Platform Beyond Vehicle (PBV) business, starting with the PV5 later this year.
Earlier today, we learned Kia’s midsize electric SUV, the EV5, is the fourth best-selling EV in Australia through March, outselling every BYD vehicle (at least for now). The EV5 is rolling out to new markets this year, including Canada, the UK, South Korea, and Mexico. However, it will not arrive in the US.
For those in the US, there are still a few Kia EVs to look forward to. Kia is launching the EV4 globally, including in the US, later this year. Although no date has been set, Kia confirmed the EV3 is also coming. It’s expected to arrive in mid-2026.
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