July 17, 2025 • 14 mins
G20 finance ministers met in Zimbali in South Africa this week, but even with US Treasury Secretary Scott Bessent skipping the event - Donald Trump's trade policy dominated discussions at the expense of President Ramphosa’s agenda.
In this episode Jennifer Zabasajja speaks to South Africa Reserve Bank governor Lesetja Kganyago about the impact of the global trade war, and Bloomberg Economist Yvonne Mhango joins Jennifer to explain how the latest moves on tariffs are affecting countries in Africa.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Finance ministers and central bank governors from the G twenty
countries met in South Africa this week, but despite the
US Treasury Secretary Scott Bessett again skipping the summit, US
tariffs are still driving the agenda.
Speaker 3 (00:25):
You know, we've taken in hundreds of billions of dollars
in tariffs, hundreds of billions, and we haven't even started yet.
And it's going to be a great thing for our country.
I think it's going to be a fair thing for
the world. And we really haven't had too many complaints.
Speaker 2 (00:40):
While South Africa wanted to focus on debt relief, climate
and reform of global institutions, attention is instead firmly focused
on the fallout of a global trade war.
Speaker 4 (00:51):
We, of course, meeting at a moment of ongoing uncertainty
in the global economy, uneven growth trajectories, elevated debt levels,
persistent inflationary pressures, and the complex implications of tightening financial conditions.
The multilateral system is being tested, and our collective ability
(01:12):
to respond will shape the pace of our recovery.
Speaker 2 (01:16):
On today's episode of The Next Africa podcast, we'll look
at why there's only one topic dominating the agenda, and whether,
as the US continues to ignore the G twenty, President
Zero Ramaposa has any chance to make an impact with
this year's presidency. I'm Jennifer Zabisajap and this is the
(01:38):
Next Africa Podcast, bringing you one story each week from
the continent driving the future of global growth with the
context only Bloomberg can provide. I'm in Zimbali on the
Indian Ocean coast of South Africa for what was hoped
to be one of the flagship events for South Africa's
presidency of the G twenty. President Ramaposa had hoped he
(02:01):
could be the voice of the global South and push
war agreement on issues such as debt relief and also
climate finance. But instead, all of the talk this year
has been about global trade and the impact of President
Trump's tariff policy. In a moment, we're going to be
speaking to Bloomberg's Africa economist Von Mango, but first let's
(02:23):
hear from some of the key figures on the fringes
of the G twenty. I spoke with Lascia Kenyajo, the
Central Bank Governor of South Africa. How much do you
think tariffs and tariff threats really are are sort of
clouding any of these priorities that South Africa actually set
out for in this two twenty presidency.
Speaker 5 (02:43):
Well, the term ifs remember get imposts on the economy
that is planting that it would like to have test
it is a cost on the consumers of that country
in terms of pricing and the loot. But for all
of us are exporting to the country that imposes terriffs,
(03:03):
there is an impact on output and in the case
of South Africa, the biggest impacts that come through the
automative industry and the agricultural sector. The issue about also
there is these important issues with having to grapple with
what would this mean for the outlook of the USA
(03:26):
economy and the poster that the FED might take in
terms of monetary policy, and what did you mean to
global financing conditions. Then the problem is that there are
so many moving paths which is not clear where we
would end up. Uncertainty abound and every way we talk
about where unsettin about this, we are unsetting about that,
(03:47):
and many central bandst resorts to just presenting a forecast
and also have to do a scenario because we do
not know how these things will open up.
Speaker 2 (03:57):
Is the absence of Scott person and your counterpart in
the US, does that then set back the progress?
Speaker 5 (04:03):
But counterpart, my counterpart was here in February. My counterpart
was in Washington, and he did indicate right at the
beginning of the year that he will do the fact
Amalary meeting, and he will do the April meeting, but
that he will not do his meeting. He will be
the FAT will be represented by a vice Chairlenge. And
(04:24):
at the US flag, both the treasure inside and the
fat side, there will be people. They're representing the US.
What matters is is there some way behind the flat
is able to articulate the position of profit country.
Speaker 2 (04:35):
That is important. Okay, so the absence of Scott Paston,
then it is not necessarily a snub. You don't see
it as a snub for US.
Speaker 5 (04:42):
This is not an absence of the US. See.
Speaker 2 (04:44):
I want to ask too about monetary policy, because we
have seen inflation here in South Africa at least at
or near or below the target for the central Bank
for about eight consecutive ones I believe it's been and
yet you still say the outlook is clouded. I think
the term that you use, yes, the outlook is cloud
Are you confident though, that inflation is moderating and moderating
(05:08):
lower as the forecast did suggest over the past few months.
Speaker 5 (05:12):
We are confident the deity to moderated and we actually
our basine is that we think that it really remain
throughout our focus over the next twenty four months, that
tally remain within targeting. But we do questions that the
outlook is clouded. There is uncertainty out there in the
global space in the main and I'm nott the international
(05:35):
confidence I had attended about by the central bands over
the past three months keeps on tammaring on the issue
of uncertainties, monetary policy in uncertain times, financial stability, implications
of the uncertain environment. Uncertainty is the word that is feminine.
Speaker 2 (05:53):
To stick with me. When we come back, we'll hear
from von Mango about what's at stake in this global
trade We'll be right back. Welcome back today on the podcast,
we're discussing the G twenty finance leader's summit in South
Africa that was this week, as the world continues to
(06:14):
focus on growing trade tensions. Bloomberg's Africa economist von Mango
is joining me now, Yvon. We spoke with you earlier
in the year when the original tariffs were introduced. Of course,
there has been quite a number of changes that have
happened since then. Talk to us about the impact of
some of those changes over the past few months on
(06:34):
Sub Saharan Africa.
Speaker 1 (06:36):
So the last time we spoke, the tariffs, the reciprocal
tariffs have just been imposed by the Trump administration. Since then,
there was that ninety day pause that they announced in
about mid April and that expired last week. Essentially, what
was meant to happen during this ninety day pause is
the US, since Trade partners was supposed to approach the
(06:57):
US and negotiate lower tariffs by offering some sort of concessions.
We saw a president from Apausa of South Africa be
the delegation to the United States and part of the
reason for that visit was to try and reach a
favorable agreement when it comes to trade. As you're well aware,
several African countries are part of what was known as
(07:21):
the Africa Growth Opportunity Act. Basically that offered duty free
access for several African countries into the United States. So
you can imagine coming from that duty free access to
a high levee has significant implications. The country hardest hit
we touched upon this last time we spoke is Lusutu,
(07:42):
which was slapped for fifty percent tariff even within the
ninety day pause period, which gave the country an opportunity
to negotiate. We've already seen factories closed down. These factories
were producing garments that they exported to the United States
and already seen jobs lost as a result. In terms
of South Africa, the most industrialized country on the continent.
(08:04):
What we heard about ten days ago from the United
States is that the thirty percent reciprocal tariff would be
reinstated on the first of August. It did suggest that
there was scope in the three weeks until that date
for the country to still have talks with the United States,
but we haven't heard anything as yet, and I think
(08:25):
several countries are preparing themselves to have the original high
levees imposed.
Speaker 2 (08:30):
Would you say South Africa is the hardest hit in
Sub Saharan Africa, I mean we talked about a few
of the other smaller economies that are being maybe unjustly targeted,
is what i'd call it. But would you say South
Africa is maybe going to take the hardest brunt short answer.
Speaker 1 (08:47):
To that is no. I think a small, open economy
like this to be harder hit. And the main reason
is because their export to the United States accounts for
ten percent of GDP. That's quite a big hit. We've
modeled the impact on South Africa's economy, so yes, the
US is an important trade partner. Ten percent of the
country's exports end up in the United States, a court
(09:08):
of which she used to enjoy duty free access. That's
your like of your citrus products from the agriculture industry,
as well as the automotive industry. However, when we look
at the actual impact on GDP, it's less than a
one percent hit. To be exactly, it's zero point three
percent of GDP that's at risk as a result of
these tariffs. So the impact, particularly compare to the Asian economies,
(09:33):
is relatively small for Africa in general, but of course
for the smaller economies such as Lisutu, they're going to
see a much more significant repercussions as a result of
this trade policy.
Speaker 2 (09:46):
And ivon at the G twenty summit, as we've talked
about South Africa was really hoping this would be a
year where they can focus on a lot of the
Global South priorities. It has really become a year that
has been focused on these tariffs and towarding what many
people see as a bigger and broader trade war. Is
(10:06):
there anything that maybe central bank governors, finance ministers can do.
Are there any policies in place or discussions that maybe
you're hearing to support or to offset some of the
policies of the tariffs and from the Trump administration.
Speaker 1 (10:23):
So yes, you're right. In terms of the original objectives
that South Africa had as the leading the presidency of
the G twenty, this year a lot of those ideas,
such as addressing climate change, putting debts, the issue of
the developing world's high indebtedness as a core issue to
be addressed, particularly by our developer partners, those issues now
(10:46):
have been sidelined, which is unfortunate. And as you're right,
many people are just reacting to the tariffs and how
they can respond to that. In terms of how policymakers
can react, I guess on the Monty policy side to banks,
if they have the room to do so, can put
in place accommodative policy PUS as you can imagine the
(11:06):
hits that the impact of tips will be a slow
down in growth generally, and that's globally, So it's a
slower demand for our commodities and our exports, not just
from the United States but from the rest of the world,
which is also being hurt by these levees. So in
countries where inflation is benign and in South Africa, were
fortunate enough to say that that is the case at
(11:27):
this point in time. That means that cent to banks
can look at easy moneted policy to create a more
accommodative environment that will support growth and consumption in their
particular economies. On the fiscal side, what can finance ministers do? Unfortunately,
the room for expansionary policy is very limited because we're
(11:49):
just it's been five years since the pandemic, and then
two years after the pandemic we experienced the impact of
commodity prices, but again the grain sides spike and that
led to inflation and high inflation globally, but that also
impacted several African countries on the fiscal side, So what
your face with the countries that are actually trying to
(12:10):
reduce their budget deficits and to restore their debt positions
to more sustainable levels. So our debt was meant to
be such an important issue at these G twenty meetings.
So the point I'm trying to make is there's very
limited scope for finance ministers to put in place expansionary
policies that would stimulate growth.
Speaker 2 (12:31):
And we heard from lesa Ya Kanyaho actually saying that
it's it's difficult to say, is what he said, if
risks are actually materializing based on the data, would you
agree with that?
Speaker 1 (12:44):
Well, yes, I think it's term the wash. He spoke
something about high to nightmare to forecast anything, and it's
absolutely right. I mean, as a central bank governor when
they're providing their rate decisions, which this African Reserve Bank
will do later this month, they're forward looking, they're looking
at the inflation and in this environment, it's highly uncertain,
as you know, policy announced on such a high frequency
(13:07):
basis and there's no guarantee that those policies that are
being announced will be sustained. So yes, it is quite
challenging in which environment in which to make policy. But
that said, what we are seeing which is quite interesting
is that for now, at least outside of the United
States and in some emerging markets, we are seeing some
softening of inflation, and that's we think as a consequence
(13:30):
of the currencies doing well in emerging markets under a
week dollar. So of course if your currency strengthy against
a week dollar, what it means is that it reduces
your important inflation. So we are seeing currencies soften on
the back of that. It's also helping soften energy prices,
which we've seen in South Africa. So inflation is actually
(13:52):
cooler than many anticipated in many of our emerging markets,
allowing for accommodated policy. So this is some of the
trends we're already be seeing which could help particularly intents
of trying to lick to growth if on Mango.
Speaker 2 (14:06):
Thank you as always for joining us and for your insights,
and you can read all of our coverage on the
G twenty on Bloomberg platforms now, including the Next African Newsletter.
We'll put a link to that in the show notes.
This program was produced by Adrian Bradley and tiwa Adebayo.
(14:27):
Don't forget to follow and review the show wherever you
usually get your podcasts. I'm Jennifer's Abasaja, thanks as always
for listening.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Finance ministers and central bank governors from the G twenty
countries met in South Africa this week, but despite the
US Treasury Secretary Scott Bessett again skipping the summit, US
tariffs are still driving the agenda.
Speaker 3 (00:25):
You know, we've taken in hundreds of billions of dollars
in tariffs, hundreds of billions, and we haven't even started yet.
And it's going to be a great thing for our country.
I think it's going to be a fair thing for
the world. And we really haven't had too many complaints.
Speaker 2 (00:40):
While South Africa wanted to focus on debt relief, climate
and reform of global institutions, attention is instead firmly focused
on the fallout of a global trade war.
Speaker 4 (00:51):
We, of course, meeting at a moment of ongoing uncertainty
in the global economy, uneven growth trajectories, elevated debt levels,
persistent inflationary pressures, and the complex implications of tightening financial conditions.
The multilateral system is being tested, and our collective ability
(01:12):
to respond will shape the pace of our recovery.
Speaker 2 (01:16):
On today's episode of The Next Africa podcast, we'll look
at why there's only one topic dominating the agenda, and whether,
as the US continues to ignore the G twenty, President
Zero Ramaposa has any chance to make an impact with
this year's presidency. I'm Jennifer Zabisajap and this is the
(01:38):
Next Africa Podcast, bringing you one story each week from
the continent driving the future of global growth with the
context only Bloomberg can provide. I'm in Zimbali on the
Indian Ocean coast of South Africa for what was hoped
to be one of the flagship events for South Africa's
presidency of the G twenty. President Ramaposa had hoped he
(02:01):
could be the voice of the global South and push
war agreement on issues such as debt relief and also
climate finance. But instead, all of the talk this year
has been about global trade and the impact of President
Trump's tariff policy. In a moment, we're going to be
speaking to Bloomberg's Africa economist Von Mango, but first let's
(02:23):
hear from some of the key figures on the fringes
of the G twenty. I spoke with Lascia Kenyajo, the
Central Bank Governor of South Africa. How much do you
think tariffs and tariff threats really are are sort of
clouding any of these priorities that South Africa actually set
out for in this two twenty presidency.
Speaker 5 (02:43):
Well, the term ifs remember get imposts on the economy
that is planting that it would like to have test
it is a cost on the consumers of that country
in terms of pricing and the loot. But for all
of us are exporting to the country that imposes terriffs,
(03:03):
there is an impact on output and in the case
of South Africa, the biggest impacts that come through the
automative industry and the agricultural sector. The issue about also
there is these important issues with having to grapple with
what would this mean for the outlook of the USA
(03:26):
economy and the poster that the FED might take in
terms of monetary policy, and what did you mean to
global financing conditions. Then the problem is that there are
so many moving paths which is not clear where we
would end up. Uncertainty abound and every way we talk
about where unsettin about this, we are unsetting about that,
(03:47):
and many central bandst resorts to just presenting a forecast
and also have to do a scenario because we do
not know how these things will open up.
Speaker 2 (03:57):
Is the absence of Scott person and your counterpart in
the US, does that then set back the progress?
Speaker 5 (04:03):
But counterpart, my counterpart was here in February. My counterpart
was in Washington, and he did indicate right at the
beginning of the year that he will do the fact
Amalary meeting, and he will do the April meeting, but
that he will not do his meeting. He will be
the FAT will be represented by a vice Chairlenge. And
(04:24):
at the US flag, both the treasure inside and the
fat side, there will be people. They're representing the US.
What matters is is there some way behind the flat
is able to articulate the position of profit country.
Speaker 2 (04:35):
That is important. Okay, so the absence of Scott Paston,
then it is not necessarily a snub. You don't see
it as a snub for US.
Speaker 5 (04:42):
This is not an absence of the US. See.
Speaker 2 (04:44):
I want to ask too about monetary policy, because we
have seen inflation here in South Africa at least at
or near or below the target for the central Bank
for about eight consecutive ones I believe it's been and
yet you still say the outlook is clouded. I think
the term that you use, yes, the outlook is cloud
Are you confident though, that inflation is moderating and moderating
(05:08):
lower as the forecast did suggest over the past few months.
Speaker 5 (05:12):
We are confident the deity to moderated and we actually
our basine is that we think that it really remain
throughout our focus over the next twenty four months, that
tally remain within targeting. But we do questions that the
outlook is clouded. There is uncertainty out there in the
global space in the main and I'm nott the international
(05:35):
confidence I had attended about by the central bands over
the past three months keeps on tammaring on the issue
of uncertainties, monetary policy in uncertain times, financial stability, implications
of the uncertain environment. Uncertainty is the word that is feminine.
Speaker 2 (05:53):
To stick with me. When we come back, we'll hear
from von Mango about what's at stake in this global
trade We'll be right back. Welcome back today on the podcast,
we're discussing the G twenty finance leader's summit in South
Africa that was this week, as the world continues to
(06:14):
focus on growing trade tensions. Bloomberg's Africa economist von Mango
is joining me now, Yvon. We spoke with you earlier
in the year when the original tariffs were introduced. Of course,
there has been quite a number of changes that have
happened since then. Talk to us about the impact of
some of those changes over the past few months on
(06:34):
Sub Saharan Africa.
Speaker 1 (06:36):
So the last time we spoke, the tariffs, the reciprocal
tariffs have just been imposed by the Trump administration. Since then,
there was that ninety day pause that they announced in
about mid April and that expired last week. Essentially, what
was meant to happen during this ninety day pause is
the US, since Trade partners was supposed to approach the
(06:57):
US and negotiate lower tariffs by offering some sort of concessions.
We saw a president from Apausa of South Africa be
the delegation to the United States and part of the
reason for that visit was to try and reach a
favorable agreement when it comes to trade. As you're well aware,
several African countries are part of what was known as
(07:21):
the Africa Growth Opportunity Act. Basically that offered duty free
access for several African countries into the United States. So
you can imagine coming from that duty free access to
a high levee has significant implications. The country hardest hit
we touched upon this last time we spoke is Lusutu,
(07:42):
which was slapped for fifty percent tariff even within the
ninety day pause period, which gave the country an opportunity
to negotiate. We've already seen factories closed down. These factories
were producing garments that they exported to the United States
and already seen jobs lost as a result. In terms
of South Africa, the most industrialized country on the continent.
(08:04):
What we heard about ten days ago from the United
States is that the thirty percent reciprocal tariff would be
reinstated on the first of August. It did suggest that
there was scope in the three weeks until that date
for the country to still have talks with the United States,
but we haven't heard anything as yet, and I think
(08:25):
several countries are preparing themselves to have the original high
levees imposed.
Speaker 2 (08:30):
Would you say South Africa is the hardest hit in
Sub Saharan Africa, I mean we talked about a few
of the other smaller economies that are being maybe unjustly targeted,
is what i'd call it. But would you say South
Africa is maybe going to take the hardest brunt short answer.
Speaker 1 (08:47):
To that is no. I think a small, open economy
like this to be harder hit. And the main reason
is because their export to the United States accounts for
ten percent of GDP. That's quite a big hit. We've
modeled the impact on South Africa's economy, so yes, the
US is an important trade partner. Ten percent of the
country's exports end up in the United States, a court
(09:08):
of which she used to enjoy duty free access. That's
your like of your citrus products from the agriculture industry,
as well as the automotive industry. However, when we look
at the actual impact on GDP, it's less than a
one percent hit. To be exactly, it's zero point three
percent of GDP that's at risk as a result of
these tariffs. So the impact, particularly compare to the Asian economies,
(09:33):
is relatively small for Africa in general, but of course
for the smaller economies such as Lisutu, they're going to
see a much more significant repercussions as a result of
this trade policy.
Speaker 2 (09:46):
And ivon at the G twenty summit, as we've talked
about South Africa was really hoping this would be a
year where they can focus on a lot of the
Global South priorities. It has really become a year that
has been focused on these tariffs and towarding what many
people see as a bigger and broader trade war. Is
(10:06):
there anything that maybe central bank governors, finance ministers can do.
Are there any policies in place or discussions that maybe
you're hearing to support or to offset some of the
policies of the tariffs and from the Trump administration.
Speaker 1 (10:23):
So yes, you're right. In terms of the original objectives
that South Africa had as the leading the presidency of
the G twenty, this year a lot of those ideas,
such as addressing climate change, putting debts, the issue of
the developing world's high indebtedness as a core issue to
be addressed, particularly by our developer partners, those issues now
(10:46):
have been sidelined, which is unfortunate. And as you're right,
many people are just reacting to the tariffs and how
they can respond to that. In terms of how policymakers
can react, I guess on the Monty policy side to banks,
if they have the room to do so, can put
in place accommodative policy PUS as you can imagine the
(11:06):
hits that the impact of tips will be a slow
down in growth generally, and that's globally, So it's a
slower demand for our commodities and our exports, not just
from the United States but from the rest of the world,
which is also being hurt by these levees. So in
countries where inflation is benign and in South Africa, were
fortunate enough to say that that is the case at
(11:27):
this point in time. That means that cent to banks
can look at easy moneted policy to create a more
accommodative environment that will support growth and consumption in their
particular economies. On the fiscal side, what can finance ministers do? Unfortunately,
the room for expansionary policy is very limited because we're
(11:49):
just it's been five years since the pandemic, and then
two years after the pandemic we experienced the impact of
commodity prices, but again the grain sides spike and that
led to inflation and high inflation globally, but that also
impacted several African countries on the fiscal side, So what
your face with the countries that are actually trying to
(12:10):
reduce their budget deficits and to restore their debt positions
to more sustainable levels. So our debt was meant to
be such an important issue at these G twenty meetings.
So the point I'm trying to make is there's very
limited scope for finance ministers to put in place expansionary
policies that would stimulate growth.
Speaker 2 (12:31):
And we heard from lesa Ya Kanyaho actually saying that
it's it's difficult to say, is what he said, if
risks are actually materializing based on the data, would you
agree with that?
Speaker 1 (12:44):
Well, yes, I think it's term the wash. He spoke
something about high to nightmare to forecast anything, and it's
absolutely right. I mean, as a central bank governor when
they're providing their rate decisions, which this African Reserve Bank
will do later this month, they're forward looking, they're looking
at the inflation and in this environment, it's highly uncertain,
as you know, policy announced on such a high frequency
(13:07):
basis and there's no guarantee that those policies that are
being announced will be sustained. So yes, it is quite
challenging in which environment in which to make policy. But
that said, what we are seeing which is quite interesting
is that for now, at least outside of the United
States and in some emerging markets, we are seeing some
softening of inflation, and that's we think as a consequence
(13:30):
of the currencies doing well in emerging markets under a
week dollar. So of course if your currency strengthy against
a week dollar, what it means is that it reduces
your important inflation. So we are seeing currencies soften on
the back of that. It's also helping soften energy prices,
which we've seen in South Africa. So inflation is actually
(13:52):
cooler than many anticipated in many of our emerging markets,
allowing for accommodated policy. So this is some of the
trends we're already be seeing which could help particularly intents
of trying to lick to growth if on Mango.
Speaker 2 (14:06):
Thank you as always for joining us and for your insights,
and you can read all of our coverage on the
G twenty on Bloomberg platforms now, including the Next African Newsletter.
We'll put a link to that in the show notes.
This program was produced by Adrian Bradley and tiwa Adebayo.
(14:27):
Don't forget to follow and review the show wherever you
usually get your podcasts. I'm Jennifer's Abasaja, thanks as always
for listening.
Host
Jennifer Zabasajja
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