Carbon tax to slash South Africa’s exports

Carbon taxes, which the EU braces to impose, could slash by up to 10% South African exports, the central bank warned.

The warning comes as the South African economy navigates tumultuous waters, with the flight of foreign investors, corruption, insecurity and electricity outages.

The country produces 80% of its electricity from coal and is seeking to solve recurrent electricity cuts by signing deals with floating power-stations operated by Turkey’s Karpowership.

Despite improvement in car and manufactured goods exports, South Africa remains reliant on mineral exports, making it vulnerable to commodity price fluctuations.

In 2023, South Africa’s exports dropped 10.6% to $110 billion, due in part to currency depreciation and lower commodity prices.