The South African government has taken its biggest steps yet to engage the private sector in revitalizing the country’s deteriorating freight-rail network and ports. Transport Minister Barbara Creecy issued a call for information on how companies can invest in critical rail lines and ports to help fix infrastructure challenges and facilitate the export of key commodities. This step marks the beginning of a structured process, with formal proposals expected to be solicited by August.
The country’s logistics infrastructure has reached alarming lows, with coal railings plummeting to their weakest levels in nearly three decades and iron ore shipments to Saldanha port nearing a decade-low. Carmakers near Pretoria are forced to rely on road transport to ship vehicles to ports, while coastal manufacturers face similar challenges in reaching Gauteng, South Africa’s largest automotive market. “South Africa’s rail and port infrastructure face substantial challenges, including declining performance,” Creecy noted, adding that “the limited availability of state resources to fund infrastructure development and address backlogs has intensified these challenges”.
While the government plans to retain ownership of the infrastructure, private-sector involvement could include operating trains on state tracks, providing expertise, leasing operations, and funding export terminals. Priority will be given to rail lines such as the Northern Cape-to-Saldanha route, used by Anglo’s Kumba Iron Ore Ltd., and connections to Richards Bay for coal and chrome exports. Additional focus will target container routes between Gauteng and Durban, as well as automotive lines in the Eastern Cape. With coal, iron ore, and vehicles among South Africa’s top exports, these efforts aim to reverse a $27 billion economic setback.
ZAR Markets
After starting the week off on the front foot with some strong intraday gains during early trade yesterday, the ZAR bears took over and the currency ended the day weaker. The USD-ZAR can still drift a bit higher before testing the ceiling of its January-March downtrend, but an improvement in market sentiment overnight is providing some downside momentum this morning. This improvement came from signs that the Trump administration might be somewhat more lenient with tariffs after the president said that he would not impose all of his threatened tariffs on April 2 and that some countries may get breaks. Pulling the lens back slightly, it is notable that the ZAR has not taken full advantage of the dollar’s broader decline at the start of this month, suggesting that there is a risk premium being priced into the local unit at the moment as investors await the outcome of ongoing GNU negotiations concerning the budget.
Global FX Markets
The U.S. dollar reached a three-week high against the yen on Tuesday, March 24, 2025, climbing above USD/JPY150 to peak at USD/JPY150.92 bolstered by strong U.S. services data and tempered tariff concerns. President Donald Trump’s comments that not all threatened levies would hit on April 2, with some countries potentially spared, eased fears of a U.S. growth slowdown, lifting Wall Street and the dollar. Robust U.S. PMI services data drove up U.S. yields, contrasting with Japan’s contracting services and manufacturing sectors. The dollar also strengthened to EUR/USD1.0780 yesterday (its highest since March 6) and pushed the U.S. dollar index to 104.3, marking four consecutive gains. Sterling fell to a two-week low of GBP/USD1.2883 before recovering marginally to trade north of GBP/USD1.2900 again, while the Australian dollar held steady at AUD/USD0.6285 amid tariff optimism and an upcoming budget announcement. All of that said, uncertainty lingers as Trump confirmed imminent automobile tariffs, complicating market predictions amid mixed U.S. growth signals. Speculators turned net bearish on the dollar last week for the first time since October, per Commodity Futures Trading Commission data, though positions remain near neutral.