As we count the last hours of 2025, South Africans are wondering if 2025 was a better year for the economy than 2024 was and whether 2026 will be the year when the economy will start performing as economists wish for, especially since the gold price reached record highs and the rand stabilised. Gold started the year on $2 624.38 per fine ounce and reached $4,393.76 this afternoon. Theprice of gold increased by 10% just in the past month and by almost 70% since the beginning of the year.
After Covid, we thought our economy would pick up and shake off the past few years’ sluggish economic growth. We struggled through 2020, 2021 and 2023 to overcome the constraints of lockdown. Then came 2024: Covid has become one of the flu variants; logistics picked up globally, but now there was a shortage of staples due to the war in Ukraine.
All through 2024, we balanced good news about what can be in store for our economy while trying not to panic about what the new president in the White (Gold) House would have in store for world trade and South Africa in particular, especially regarding the African Growth and Opportunity Act (Agoa). As fireworks streaked the skies across South Africa at the end of 2024, little did we know what would wait in 2025: a Budget that was postponed twice due to a disagreement on Vat, the rand decreasing due to the issues with Budget 2025, the closure of ArcelorMittal, shedding thousands of jobs, the lowest inflation in five years and South Africa being removed from the Financial Action Task Force (FATF) grey list. In South Africa, 2024 was also the year when the country’s first Government of National Unity (GNU) was sworn in.
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With the elation came the warnings that a break in the GNU’s unity could damage the economy. Thankfully, it held, although the GNU also caused the biggest economic calamity of the year. While MPs were sitting ready in parliament and journalists waited to inform their audiences of what Budget 2025 would bring, we waited… and waited… for the Minister of Finance, Enoch Godongwana, to come and deliver Budget 2025.
Then came the shocking announcement: Budget 2025 was postponed because all the parties in the GNU did not agree that Vat should be increased by 2% to make up the budget shortfall. For the first time in South African history, the Budget was not delivered on the day pencilled in on parliament’s calendar. After one more postponement, the budget was passed, without a Vat increase.
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