Building a stronger economy is the best way for South Africa to prepare for any internal or external shocks.

While this requires the country to successfully carry out reforms, South Africa is in a distinctly advantageous position because it has strong historical and trade ties with both the East and the West, says business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso.

“Few other countries enjoy such an advantage. We should work harder to benefit from our relationships, rather than creating a divisive 'us or them' situation,” she notes in her latest weekly newsletter.

South Africa's economy is less than 0.5% of global GDP, and it does not have significant economic clout. It is too small to pick sides.

"We should work to find common ground between partners – an approach India seems to be getting right. This is where our strength lies. This approach also works well with our non-aligned status, and we should stick to it.”

It is important that South Africa works hard to improve its trade with each partner. Its trade deficit with China, for example, is at R177-billion, up from about R23-billion in 2010. The country similarly has trade deficits with Western countries.

“Improving each of these deficits would boost the economy,” she says.

Further, geopolitical competition remains broadly inflationary and can cause disruptions to supply chains, trade and investment because it shifts the focus of investment from efficiency to resilience, tax and advisory services firm KPMG’s Africa CEO Outlook Report 2024 says.

Southern African CEOs are most concerned about the impact of economic decoupling between countries, which may lead to pricing pressures over the next three years, followed by cybersecurity, and emerging or disruptive technologies, according to the study.

The “growing complexity and variety of demands of leading a large organisation are being felt keenly by Southern African CEOs, with 77% confessing they feel under more pressure to ensure the long-term prosperity of their business”, the KPMG report says.

“These are the issues South Africa’s business leaders need to consider in their decision-making,” Mavuso says.

“It is a trying time for South Africa’s business leaders. The country is on the right path but many threats exist that could push us off it.

“Global tensions highlight how important it is to keep focused on driving the reforms that will provide a strong foundation for sustained economic growth,” she adds.