SA must weather the Global Storm with strategy, not emotion

At the SA Shopping Council Congress 2025, Jeremy Gardiner, Director at Ninety One, delivered a frank, insightful presentation titled "Navigating Global Turbulence: South Africa’s Opportunities and Challenges."

Gardiner unpacked the volatile global economic climate from tariff wars and rising debt to geopolitical conflict and explained what it all means for South Africa. His key message? South Africans need to drop the emotion, stay the course, and fix the country piece by piece.

Here are the most important takeaways.

Global Reset: Capital is Shifting

‍Early 2025 began with optimism, but by April, the IMF had sharply revised global growth forecasts downward. Turmoil triggered a reallocation of capital from US assets into Europe, the UK, and emerging markets. Global investors, once US-heavy, began rediscovering diversification.

US tariffs sparked the chaos. Contrary to belief, they are paid not by exporters but by American companies, who pass costs onto consumers. This has accelerated inflation and may politically backfire for Trump.

Interest rate pressure is mounting. Trump wants them down to spark growth ahead of the 2026 midterms, and markets expect cuts soon. If Powell resists, he’ll likely be replaced.

Wars, Trade Deals & Fractured Alliances

• Russia - Ukraine and Middle East conflicts grind on with no resolution in sight - Europe fears escalation and is boosting defence spending.
• US - EU trade deals are one-sided - Europe now faces 15% tariffs, while American goods enter tariff-free. Meanwhile, China’s exports to the US are shrinking fast, with Vietnam and India gaining market share.
• SA must tread carefully - Poor foreign policy choices could provoke retaliation from major trading partners.

South Africa: Falling Short of Potential

‍South Africa should be benefitting from the global risk-on trend, but we’re not, or at least not enough. Why?

• Structural reform has stalled.
• Political infighting within the GNU has dented investor confidence.
• Lack of economic growth and fears of populism are holding us back.

As Gardiner put it, “It irritates South Africans not just how bad things are, but how easily they could be better if we simply did the right things.”

Progress we Are making

‍Despite setbacks, some wins are emerging:

• Electricity stabilised, unlocking up to 1.5% in potential GDP growth.
• Digitisation of visa systems and clearing of 300,000+ backlogs supports tourism and skilled immigration.
• Rail and port performance is improving.
• Lifestyle audits are underway: 400+ high-risk individuals under review.
• Treasury has completed the FATF’s 22 compliance items - SA may exit the grey list in October.

Growth Outlook: From Survival to Momentum

• Inflation will end the year around 4.5%, within the SARB’s band.
• Interest rates will likely hold steady into 2026.
• GDP growth is forecast at 1% for 2025, rising to 2 - 4% over the next four years.
• If we reach just 2.5%+ by 2027, it may shield us from a populist political shift.

Trade Risk: Tariffs will hurt Key Sectors

‍South Africa faces a 30% US tariff on certain exports, not catastrophic nationwide, but damaging regionally and by sector:

• Auto parts and manufacturing
• Citrus, wine and agriculture

These make up 20 - 30% of SA - US exports. Job losses could hit 30,000 to 100,000 in the Northern, Western and Eastern Cape.

“Foreign relations need to be strategic,” Gardiner warned. “We must stop annoying our biggest customers.”

SA Defence: Underprepared, yet safe?

‍SA spends less than 1% of GDP on defence. The army is aging and stretched thin. Yet ironically, SA ranks among the world’s safest geographies in the event of global war, thanks to location, neutrality, and abundant food/water.

AI: The Tool, not the threat

‍Gardiner addressed AI briefly, quoting:

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“I want AI to do my dishes so I can do my art, not the other way around.”

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His advice? Use AI like an arrogant intern. It won’t replace you, but someone using it will replace someone who isn’t.

SA has strengths we undervalue

• Cost of living is 53% lower than the US, says the Big Mac Index.
• Cape Town named world’s best city 2025 by Time Out and The Telegraph.
• SA is the only country to hold both the Rugby and Cricket World Cups at the same time. That says something.

Conclusion: Fix it piece by piece

‍Gardiner closed with a hard truth: “Don’t change sails in a storm.” We’ve weathered worse. But now is the time to stop bickering and start building.

His final message:

• Focus on job creation - Every decision should ask: Will this create or destroy jobs?
• Stop choosing sides geopolitically - Stay neutral, strategic, and job-focused.
• Keep building quietly, methodically, and collectively.

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“Instead of fighting with ourselves, let’s pull together as a nation to defend against the global storm.”

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