Cecil Kilpin | August 2025 Newsletter

In response, Finance Minister Enoch Godongwana issued a statement clarifying government’s stance on inflation targeting. While the SARB expressed a preference for forecasting around a 3% inflation objective, the Minister emphasized that any formal change to the inflation-targeting framework remains a policy decision requiring Cabinet approval and broad consultation. He dismissed speculation that government would immediately endorse the SARB’s preference, stating that adjustments to the framework will follow the established process, not unilateral announcements.

The Minister reiterated the importance of policy coordination between National Treasury and the Reserve Bank while respecting the SARB’s operational independence. He underscored that fiscal and monetary authorities share the goal of price stability, but changes to the target band will not be rushed. This assurance comes amid heightened public debate on whether a lower inflation target could anchor expectations and reduce borrowing costs.

The rate cut is expected to ease pressure on households and businesses, reducing monthly repayments on loans and potentially stimulating demand. However, structural constraints—such as logistics bottlenecks and energy challenges—continue to weigh on growth prospects. The Minister reaffirmed government’s commitment to structural reforms and fiscal discipline, signaling that monetary easing alone cannot resolve South Africa’s economic challenges.

The immediate impact is expected to be a sharp decline in demand for South African goods in the U.S. market, as higher prices make them less competitive. Industries such as automotive manufacturing, citrus farming, and steel production face the greatest risk, with potential job losses in export-driven regions like the Eastern Cape and Mpumalanga. Analysts warn that the ripple effect could slow GDP growth, strain supply chains, and dampen investor confidence.

The political rationale behind the tariffs appears rooted in U.S. protectionist policies aimed at reducing trade deficits and bolstering domestic industries. However, for South Africa, the move undermines decades of trade cooperation and raises concerns about the future of agreements like the African Growth and Opportunity Act (AGOA).

In response, South Africa’s Department of Trade, Industry and Competition has announced measures to cushion the blow, including exploring alternative markets in Africa, Asia, and the European Union, and accelerating export diversification. These strategies aim to preserve jobs and maintain foreign exchange earnings, but experts caution that such adjustments will take time.

The tariffs also highlight the urgency of structural reforms to enhance competitiveness and reduce reliance on single-market exports. While diplomatic engagement remains on the table, the economic reality is clear: South Africa must adapt swiftly to navigate this new era of trade uncertainty.

1. The Last Will and Testament

• Specify how assets should be distributed.
• Appoint heirs and legatees of choice.
• Nominate an executor to manage the estate.
• Prevent intestate succession, which occurs when someone dies without a valid Will, leading to asset distribution according to legal formulas rather than personal wishes.

• Inter Vivos (Living) Trusts: Created during the founder’s lifetime to manage assets for beneficiaries.
• Testamentary Trusts: Established in a Will and activated upon the testator’s death.
• Special Trusts: Designed for individuals with disabilities or minor children, offering tax benefits and asset protection.

• An annual exemption of R100,000 for natural persons.
• Donations between spouses, which are exempt from donations tax.
• The need to record donations in agreements and tax returns.

• In Community of Property: Assets and liabilities are shared equally between spouses.
• Out of Community of Property (without accrual): Each spouse retains separate estates.
• Out of Community of Property (with accrual): Growth in estates during the marriage is shared upon dissolution.

• Funeral costs.
• Estate duty.
• Outstanding debts. Proceeds can be directed to beneficiaries or used to settle liabilities, ensuring the estate is not burdened by financial constraints.

• Using trusts to shelter assets.
• Structuring inter-spouse bequests to leverage tax exemptions.
• Planning for liquidity to cover tax liabilities.

The Bill was adopted during an NCOP plenary session on 30 July 2025, following its earlier approval by the National Assembly. The vote saw 51 members in favor and nine against, with opposition mainly from the MKP and EFF, who argued that the allocations did not adequately address pressing socio-economic challenges. In contrast, the Government of National Unity (GNU) partners—including the ANC, DA, IFP, PA, FF Plus, and UDM—supported the Bill, emphasizing the need for fiscal stability and continuity in service delivery.

Alongside the Appropriation Bill, the NCOP also passed the Eskom Debt Relief Amendment Bill. This legislation adjusts the conditions of the original debt relief package granted to Eskom, South Africa’s state-owned power utility. The amendment aims to provide greater flexibility in managing Eskom’s financial obligations while ensuring compliance with strict governance and reporting requirements. The move is seen as critical to stabilizing the energy sector, reducing load-shedding risks, and supporting economic recovery.

Both Bills now await President Cyril Ramaphosa’s assent to become law. Their passage ensures that government operations can continue without disruption and that Eskom receives the necessary support to maintain energy security. Parliament will maintain oversight through committees and audits to ensure accountability and effective implementation.