Political economist Bongani Mahlangu has called on South Africa to strengthen economic ties within the African continent to counter the effects of the new US-imposed tariffs, which are set to take effect in seven days.
South Africa is among several countries affected, with the new tariff rate set at 30%.
Mahlangu says South Africa and its neighbouring countries should use platforms like the African Continental Free Trade Area (AfCFTA) to reduce reliance on external markets and limit the impact of the tariffs.
“It is an expansionary monetary policy which would place more money in the hands of South Africans and that would then boost domestic consumption,” Mahlangu says. “It mitigates against the high cost of living because we know that the costs of our products are going up, making it very difficult for a lot of South Africans to keep afloat.”
He further explained the potential benefits of increasing disposable income: “When you have more money in hand, you are able to then service your household expenses. You are able to then ensure that your household’s disposable income is increased, and then with the increase of the household disposable income again, you go back to domestic consumption. That means that you can also put in more money towards servicing your debt as a household.”
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