While the Eastern Cape’s economic growth prospects took a significant knock in 2025, particularly after the introduction of US tariffs on SA’s exports, the provincial government believes the new year could bring modest but much-needed relief. According to premier Oscar Mabuyane, this will depend largely on how quickly the province completes its catalytic infrastructure projects and intensifies efforts to attract investment, beginning with an investment conference scheduled for February. Mabuyane told the Dispatch during a wide-ranging interview that the effects of the export tariffs imposed by US president Donald Trump had been felt across several sectors but had hit the automotive industry — which remains the backbone of the Eastern Cape economy — particularly hard.
The tariffs, which took effect in August, resulted in job losses and declining revenue, with exports to the US — particularly by Mercedes-Benz SA, one of the province’s largest employers — dropping sharply. The slowdown, he said, had also affected companies in the automotive components supply chain, some of which were forced to shut down or retrench large numbers of workers. This had worsened unemployment in a largely rural and economically fragile province.
“The uncertainty created a lot of anxiety among people who rely on this sector to put food on the table,” Mabuyane said. He acknowledged that the Eastern Cape economy had become over-reliant on the automotive sector, which has been established in the province for more than six decades. These imports are eroding the baseline.
Read Full Article on Daily Dispatch
[paywall]
Manufacturing vehicles locally creates more jobs than simply assembling or importing them. Mabuyane said he was also concerned about what he described as the encroachment of fully built vehicles imported from parts of Asia into the South African market. He said importing vehicles for sale in SA, rather than manufacturing them in the country, undermined job creation. Manufacturing vehicles locally creates more jobs than simply assembling or importing them,” he said.
[/paywall]
